Is There a Tablet "Killer App?"

It’s unusual for a hit computer not to have a killer app driving demand, says David Needle at TabTimes. The Apple II didn’t kickstart the personal computer revolution till VisiCalc, the first electronic spreadsheet, came along. Likewise, Lotus 1-2-3 was the killer app for the IBM PC.

Email unquestionably made BlackBerry smart phones a staple of business and easy-to-use mobile browsing helped the iPhone essentially create a new industry.

One could even argue that another type of killer app vaulted the iPhone's success even higher, the App Store, the wildly popular online storefront for acquiring mobile apps.

So what’s the killer app that’s driving millions of iPad sales? That is a hard question to answer. It might be easier to say the killer app for an e-reader is “reading.”

But we might be missing the point here. Maybe it is not the “app” but the “use mode” or “killer feature” that is important.

Some of us are fond of noting that “the killer app” for any tablet device is “content consumption.” But maybe that’s more properly a “killer use case” than a “killer app.”

What was the “killer feature” or “killer use case” for mobile phones? It was the ability to talk, wherever you were. What is the killer feature or use case for a smart phone? It might be the ability to use the web, or apps, where you are.

The point is that, for any mobile device, the notion of “killer app” might be misplaced. It might be that it is the use case that provides the value, not a new app.

Some might well argue that entertainment video will emerge as the killer app for tablet devices. Others might say, more broadly, that it is content consumption which uniquely defines a tablet experience, and makes the device different from a PC.

We have had “mobile” PCs for some time. We now have ultra-mobile PCs called smart phones. Tablets are “mobile” devices, but tend to be used when people are stationary--sitting on a couch, for example.

Where we traditionally have defined television viewing as a “lean back” experience, and use of a PC as a “lean forward” experience, tablets are a bit of a blend. They are used in a lean back setting (couch, frequently), but with high interaction, as frequently is true of a PC experience. Again, it is the use case, not the apps, which possibly are key.

Content Marketing Has Value Elsewhere in an Enterprise

Most business-to-business marketers likely would agree that the primary purpose for content marketing, and hence content curation, is its role in stimulating revenue. Like all other marketing activities, content curation aims to build a sales funnel, directly or indirectly.


What tends not to be considered is whether content curation also has value for other parts of the enterprise, typically taking the form of enhanced organizational efficiency. 


Sensei Marketing argues, for example, that content curation improves collaboration between content creators (thought leaders, executive, product development, R&D, marketing) and content consumers that include not only potential customers, but also organization service, support, sales, and product development staffs. One might also argue, in that vein, that content curation also supports channel partners, not only prospects and customers.


Granted, the impact will be hard to measure, at a time when virtually all marketing executives want better analytics and measures of effectiveness. 


But here's the argument, in outline. Sales staffs can use curated content as a convenient source of  "proof points," rather than spending lots of time looking for such material on their own. 


Curated content can be a time saver for executives, allowing them to quickly stay up on important market and industry trends. 


Product development staffs can use content curation to gain new or timely insights into customer and market needs, while also benefiting from market feedback.


Curated content also can be used by external sales partners in much the same way that direct sales personnel can use the filtered content. In some cases that will consist of information on customer needs and context, in other cases provide training on product or service attributes and value. 


Content curation has value for B2B firms aside from its primary purpose of driving organizational revenue, Sensei Marketing argues. 

PayPal Here" Allows Merchants to Use Dongle, or Just a Smart Phone

PayPal's new "Here" system, that uses a new dongle to allow swiping of credit cards, and turns a smart phone into a point of sale terminal, uses software from card.io. 

Just to confuse you, though, card.io also launched its own consumer app earlier in 2012,  allowing merchants to accept purchases using a smart phone's own camera. 

The deal with PayPal seems to allow merchants to accept credit cards without readers or extra hardware, even though most of the attention is being paid to the new dongle method.

“Merchants can immediately begin accepting credit cards with nothing but a phone," card.io says. For the moment, consumer and retailer payment experience probably suggests adoption will be easier using the dongle. People are used to swiping their credit cards. 

But card.io expressly was designed to use only the camera and resident software on smart phone. One suspects the idea here is to support merchants with a dongle now, because it is culturally familiar, but allow for an easy migration to a "smart phone only" approach later. 

Google to Sell a Nexus Tablet?

It was probably inevitable, but Google is rumored to be preparing a new "Nexus" tablet, using a seven-inch form factor, for release mid-year, with a formal announcement coming potentially as early as May 2012.


The device would sell for as little as $149 in a Wi-Fi-only version. At that price point, Google would seem to be aiming directly at the Kindle Fire, which has been selling in volumes that make the Kindle Fire the first non-iPad device to get traction. 


Some will argue the device will debut with a content ecosystem less well developed. So the issue might be "why" users buy the device. People buying the Kindle Fire arguably have been doing so for access to Amazon's rather rich content offerings. 


On the other hand, some users will note that the Kindle Fire has been designed as a convenient gateway to Amazon content, but arguably does not work as well as a general-purpose tablet for web content. 

U.S. Tablet Owners Don't Like Paying for News Italians Don't Mind

Tablet owners aren’t opposed to paying for the media they really want, Nielsen says, after surveying tablet owners in the United States, United Kingdom, Germany and Italy.

The big exception, though, is "news," in the U.S. market, though most U.S. tablet owners have paid for downloaded music (62 percent) and books (58 percent) for usage on their device. Approximately half have paid for movies (51 percent).

News is the top content category among the European tablet owners surveyed: 44 percent of tablet owners in Italy, 19 percent of tablet owners in the United Kingdom and 15 percent of tablet owners in Germany say they have paid for tablet news content.

Apple's Enterprise Strategy: Win With Consumers

Some 21 percent of surveyed enterprise information workers are using one or more Apple products for work, Forrester Research says. Considering Apple doesn't really go out of its way to design or sell products to enterprises, that's significant. But Apple now has market momentum on its side, plus a growing acceptance of "bring your own device" support on the part of enterprises. 


Although the number-one place where consumers use tablets is in the living room, 37 percent of U.S. tablet owners take them to work as well. In a recent Forrester Research survey of 9,912 technology end users at SMBs and enterprises in 17 countries, Forrester found that workers in Brazil, Russia, India, China and Mexico actually led demand for wanting to use a tablet for work, and being willing to share the cost of the device with their employers.

Almost half of enterprises (1000 employees or more) are issuing Macs to at least some employees and they plan a 52 percent increase in the number of Macs they issue in 2012, according to Forrester Research managers and executives are more than twice as likely to use Apple products, suggesting an adoption pattern where the ability to use the device is something of a “perquisite,” much as at one time the ability to use a BlackBerry was a perquisite for enterprise executives. 


 But younger information workers (IT staffs for example) are twice as likely to use Apple products as older ones. Higher income workers are more likely to use Apple products as well, but there is a “younger worker” issue here. Most of the sample of 10,000 global information workers earns less than $50,000 a year, but the adoption rate of Apple products is almost 17 percent even in the bottom quartile of workers who make less than $12,000 per year.



Keep in mind, also, that the survey was global in scope, and Information workers in countries outside North America and Europe were more likely to use Apple products for work. Annual salaries also might tend to be lower in non-European and North American settings.




source: Forrester Research



Where click through rates are concerned, screen size matters. Simply put, larger screens tend to get higher click through rates, and some devices tend to have higher engagement than others. Smart phone screens tend to get click throughs at about a two-percent to four-percent rate.



Larger tablet screens such as those sported by the Apple iPad or Samsung Galazy get CTRs of about nine percent. The results are generally similar across device brands.

Sometimes, Not Matching Competitor Offers is the Wise Strategy

France Telecom says it will not match the low-cost mobile offers recently launched by Iliad because such aggressive pricing would be bad for network quality and innovation in the long-run, says France Telecom CEO Stephane Richard. That Orange won't compete on price might strike you as unwise.

Goldman Sachs, for example, forecasts that Iliad's market entry will cause France Telecom to lose a third of its operating profits in its domestic market by 2015.

But there are ample precedents for France Telecom to do so. Beyond higher marketing costs as competition escalates, sometimes all an incumbent can do is harvest a business. That, in fact, was AT&T’s strategy when it was a dominant long distance provider facing growing competition from a growing number of competitors, and as prices for its product continually declined.

A similar strategy has been taken by incumbent telephone companies in the face of growing competition from VoIP providers. You might argue that telcos should have jumped into VoIP aggressively, matching competitor lower prices.

They generally haven’t done that. The reason is that incumbents lose more than they gain by matching lower prices, even when everyone would agree lost market share is the inevitable result.

For an incumbent telco, matching lower competitor prices implies lower retail prices across the board, for the entire customer base, not just for the consumers buying the VoIP service. A rational telco executive would do better to preserve gross revenue and profit margin on a gradually-shrinking base of customers, rather than adopt across the board lower prices in an effort to slow the market share losses.

"The real risk is that all the operators become 'low-cost', meaning less investment, fewer services and jobs," said Richard.

Iliad, which markets its services under the name Free, touched off a price war on January 10, 2012  with an offer of unlimited calls to France and most of Europe and the United States, unlimited texts, and 3 gigabytes of mobile data for 19.99 euros ($25.83) per month, without a contract.

France Telecom and Vivendi reacted by cutting some mobile prices but only on the offers sold without phone subsidies and contracts.

Some analysts predict that France Telecom, Vivendi and Bouygues will all become structurally less profitable as Iliad takes market share in the coming years.

But that has happened before, in the telecom business. Firms as large as AT&T was, or MCI, watched profits gradually decline, to the point that both were purchased by other providers in the market.

Right now, local telcos are essentially harvesting their legacy voice business, essentially “allowing” VoIP competitors to take market share. That is a rational strategy, especially in the consumer segment of the business.

The point is that there are times when an incumbent simply cannot match prices, and has to prepare to lose market share. That might be a bigger issue for lots of mobile service providers, soon.

There is growing evidence that the high-margin mobile text messaging market is past its peak.

Danish SMS traffic, for example, decreased by over 20 percent in the first six months of 2011, according to Strand Consult, and the trend will continue in 2012.

Text messaging revenue is not declining in all markets, but is slowing in most developed markets. The most-recent data from the CTIA suggests slowing growth in the U.S. text messaging market of about nine percent.

In the Danish market,  three out of four mobile operators have been experiencing a steady decrease in their test messaging (short message service, or SMS) traffic month after month.

From 2010 to 2011, TDC experienced an SMS traffic drop of 17 percent, Telia lost 18 percent and Telenor 26 percent, while the fourth operator 3 was the only operator that had growth in their SMS traffic.

That 3 saw text messaging growth is largely attributable to the fact that 3 is gaining customers and share in the market. SMS traffic on the 3 network grew by 29 percent.

But, overall, the number of Danish SMS messages fell during the first half of 2010 to 6.4 billion and to 6.2 billion during the first half of  2011. That is a drop of about seven percent from 2010 to 2011.

Facebook messaging is the reason for the drop, Strand Consult argues..

So what are Danish operators doing? They are bundling mobile broadband with SMS and MMS packages as part of a smart phone purchase. That means service providers get paid even as the volume of text messages declines.

Finland's largest carrier, Sonera, for example, recorded a 22 percent decline in texting on Christmas Eve in 2011, versus the same night in 2010.

It isn't that people are communicating less. They are just using different methods of communicating. Text Messaging Declines  

Hong Kong also apparently saw a similar decrease on Christmas, dropping 14% from the same day in 2010. Netherlands service provider KPN provided an early warning when it announced significant declines in messaging volume earlier in 2010. KPN text message declines

Dutch telecoms regulator, OPTA, which shows a significant decline in the number of SMS sent in the Netherlands in first half of  2011 compared to the previous six-month period.

The country's largest operator, KPN, has also reported declining year-on-year messaging volumes over the last few quarters due to what it calls "changing customer behavior."

Wireless Intelligence says text messaging volumes are falling in France, Ireland, Spain and Portugal as well.

According to OPTA, the total number of SMS sent in the Netherlands stood at 5.7 billion for the first six months of the year, down 2.5 percent from 5.9 billion in the second half of  2010, even though total text messaging revenue rose slightly (0.6 percent) to EUR378 million during the period.

That should not come as a surprise. The number of over the top and social messaging alternatives has been growing for years. But there is a "network effect" for messaging, as there is for any other communications tool. Until a user is fairly sure that nearly everybody he or she wants to communicate with can be reached by a particular tool, adoption is slower.

But there always is a tipping point, where the expectation changes from "I doubt this person uses this tool" to "there is a good chance they use this tool." Finally, there is the point of ubiquity, when the assumption simply is that "everybody" uses the tool.

Also, the history of text messaging and email are instructive. Though most cannot remember a time when it was so, email and messaging services once upon a time were not federated. In other words, you could not send messages across domains.

History also tells us what happens after federation: usage explodes. With alternative messaging platforms, we still are not in a "full federation" mode, where anybody can send messages to any other user, irrespective of what device, operating system, service provider or application they prefer to use. That day will come, though, and text messaging usage and revenues will suffer.

The.maturing market illustrates a key element of business strategy.

A rational service provider strategy, when confronted by such challenges, might simply be to harvest existing revenue streams, using bundling and other approaches to maintain as much revenue as possible in legacy lines of business, while investing in the next generation of services.

As CenturyLink halted Qwest’s old VoIP business, to emphasize sales of legacy voice services, sometimes the wisest course is not to embrace disruptive services, but “cope with them,” while growing services and revenues in other areas.