The future of wireless technology and its impact

The future of wireless technology and its impact on e-business

Presentation toLoyola University GSBDr. Linda Salchenberger

April, 2000

Anna Hillers400 N. McClurg Ct. 1912Chicago, IL 60611

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Evolution of wireless technologyEvolution of wireless technology

Wireless meets InternetWireless meets Internet

Everything – everywhere - alwaysEverything – everywhere - always

Best-in-Class Segment PlayersBest-in-Class Segment Players

Trends and Emerging Business ModelsTrends and Emerging Business Models

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With 200 million subscribers world wide and international coverage, GSM is the most successful digital mobile telephone standard

GSM Global System for Mobile Communications

Encoding/Compression

BTS = Base (Transceiver)

Station

BTS = BaseStation

MSC= MobileSwitching Center

Conversion:Analog/Digital

Mobile Phone:Data, Voice

Global System for Mobile Communications (GSM) Features:Global System for Mobile Communications (GSM) Features:• SIM (Subscriber identity module) allows for identification independent from phoneSIM (Subscriber identity module) allows for identification independent from phone• International Roaming (worldwide)International Roaming (worldwide)• Voice and Data Service (SMS, 2 way messaging -> 14.4 Kbit/sec)Voice and Data Service (SMS, 2 way messaging -> 14.4 Kbit/sec)• Call forwarding, Caller ID, Wait/Hold, VoicemailCall forwarding, Caller ID, Wait/Hold, Voicemail

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HSCSD, GPRS, EDGE are GSM-based standard, which enhance data transmission through enhanced software. UMTS, the European version of 3G will reach up to 2Mbit/sec through higher bandwidth.

Upcoming Standards HSCSD, GPRS, EDGE, UMTS

HSCSD: High HSCSD: High Speed Circuit Speed Circuit Switched dataSwitched data

• Circuit Switching:

• Allows for ISDN speed: 56.7Kbit/sec

• Introduced 1999 by some GSM carriers

GPRS: GeneralGPRS: GeneralPacket RadioPacket Radio

ServiceService

• TCP/IP protocol (Internet protocol), supports a wide range of bandwidth

• Allows for up to 115 Kbit/sec

• Will be introduced by the end of 2000

EDGE: Enhanced EDGE: Enhanced Data Rates for the Data Rates for the

GSM Evolution GSM Evolution

• Allows for up to 384 Kbit/sec

• Will be introduced by 2001

3G: Third 3G: Third Generation Generation

(UMTS)(UMTS)

• Increase of bandwidth

• Allows for 2 Mbit/sec

• Will be introduced by 2002

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City: 2 MBit

Suburbs: >384 kbit

Major roads: <384 kBit

Next country

<115 kbit (GSM)

2.4-9.6 kbit (rest of world)

Integrating other systems, UMTS will offer total mobility with a trade off between mobility and capability, leading to different levels of service

InternationalRoaming

UMTS Total mobility

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UMTS is downward compatible to GSM technology but will be capable to offer advanced features beyond existing GSM systems

• Up to 2 Mbit mobile packet data

• Up to 384 Kbit mobile video

• Fixed/mobile convergence of protocols

• Switching platform based on GSM II+

• Wide range of terminals: voice, data only, multimedia

• Downward compatible to GSM networks

• Coverage limited but roaming available

• 9.6 Kbit/s data, up to 112 Kbit/s with GPRS

• Up to 64 Kbit/s mobile video with HSCSD

• Services similar to ISDN

• GSM switching platform

• Primarily voice terminals,first organiser announced

• No compatibility to other networks

• Full coverage, worldwide roaming

UMTSUMTS GSMGSM

UMTS Technical features compared with GSM

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The present differences in coverage and service between GSM and UMTS will disappear in future as GSM evolves, while UMTS expands coverage

UMTSUMTS

GSMGSM

Coverage

Ser

vice

/Cap

acity

Spe

edUMTS Development path

• GSM is the standard with highest mobility (coverage footprint) worldwide

• GSM will develop data up to 384 Kbit via GPRS

GSMGSM

• UMTS will initially only be available in urban areas, relying on GSM outside covered areas

• Early UMTS terminals will only offer limited service (speed data <64Kbit), later developing towards high speed 2Mbit/s services

UMTSUMTS

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The EU requirement will force UMTS licensing in most EU countries during year 2000 but Japan and UK will take the lead

LicensingLicensingPreparationPreparation

Licensing ofLicensing ofUMTS IUMTS I

Service Service developmentdevelopment

Licensing ofLicensing ofUMTS IIUMTS II

Mid 1999 UMTS auction

in UK

Year 2000 in UMTS licensing

period

License condition in D, DK, F, S

(others) published

EU allowsmax. 12 month licensing delay

Jan 2002, UMTS to be launched in

Europe

March 2001, DoCoMo plans to launch UMTS in

Japan

UMTS Time schedule for introduction of UMTS

The three major stakeholders areThe three major stakeholders are1.1. Customers, which demand serviceCustomers, which demand service2.2. Telecommunications operators, which want to stay ahead of the competitionTelecommunications operators, which want to stay ahead of the competition3.3. Governments, which strive for the highest priceGovernments, which strive for the highest price

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Not only telecom companies might apply for UMTS licenses but also non-telecommunication firms such as IT-companies and equipment suppliers

3-5 UMTS licenses are currently

auctioned

Non-telecom companiesNon-telecom companies Telecom companiesTelecom companies

Industry Groups• VirginIndustry Groups• Virgin

IT-companies Microsoft

IT-companies Microsoft

Distributor• European telecomDistributor• European telecom Fixed network operators

• Internet SP• Energis• NTL

Fixed network operators• Internet SP• Energis• NTL

Regional players• Cellnet• Vodafone• Orange• Hutchison

Regional players• Cellnet• Vodafone• Orange• Hutchison

Eurpean players• Vodafone-Airtouch• Telia• Deutsche Telecom

Eurpean players• Vodafone-Airtouch• Telia• Deutsche Telecom

Service provider• debitel• Mobilcom• Talkline• Airtel

Service provider• debitel• Mobilcom• Talkline• Airtel

UMTS Example for UMTS licensing in the UK

License includesLicense includes• 4 licenses with 2x15Mhz + 5Mhz unpaired each4 licenses with 2x15Mhz + 5Mhz unpaired each• Service requirement: 80% population coverage =70% area by the end of 2007Service requirement: 80% population coverage =70% area by the end of 2007• License limitation for 20 yearsLicense limitation for 20 years• No mandatory roaming, but roaming expected by governmentNo mandatory roaming, but roaming expected by government

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The wireless application protocol (WAP) is the standard for bringing content, commerce, and other value-added services to wireless networks and mobile devices.

WAP Programming ModelWAP Programming Model

RequestRequest

Origin ServerOrigin Server

Content

CGIScripts

etc.

WAP GatewayWAP Gateway

Encoders and

Decoders

ClientClient

User Agent

Response (Content)Response (Content)

Encoded RequestEncoded Request

Encoded ResponseEncoded Response

Wireless meets Internet Middleware/Critical Services WAP

BenefitsBenefits

• Globally open standard that has already reached critical mass (80% of the industry)

• Enables easy, secure access to relevant Internet/Intranet information and other services through mobile phones, pagers or other wireless devices

• Provides the technology to develop, deploy and support wireless application, namely e-commerce

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• Reduces burden of creating single, complicated, small devices

• Improves connectivity between devices

• Device-independent mobile data

– User could use Bluetooth to receive an e-Mail on a PDA from a notebook without having to power on the notebook

– User could access the Internet via cell phone while receiving Web pages on a laptop or PDA

• Wireless access to peripherals

– Connection of PCs with printers, faxes, other peripherals (e.g., PDAs)

• Ad hoc conferencing

– Facilitate ad hoc meetings (e.g., airports, hotels) that include data-sharing

• Integration of digital cameras with mobile digital devices

– Can send pictures directly from a Bluetooth-equipped camera to a PDA, notebook, or printer; or it could transmit to a wireless network

• An evolving specification of short-range radio frequency being developed with most wireless vendors and some PC manufacturers

• Enables networking between devices within a range of 10 meters (30 feet through a radio frequency link in the unlicensed 2.4 gHz band)

• Will be embedded in most cellular phones and laptop devices by the end of 2000 and cost between $5 and $15 per module

• Will be capable of speeds approaching 1 Mbps

• Backed by an alliance between Intel, Nokia, Ericcson, Toshiba, and IBM

The Bluetooth phenomenon will likely have a powerful impact on this industry in the near future.

Wireless meets Internet Middleware/Critical Services Bluetooth

DescriptionDescription ApplicationsApplications

ImplicationsImplications

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Cellular Data Users by Region (millions of subscribers)

At this early stage of development, the market for mobile data over cellular services will be more developed in Europe and Asia than in the United States.

• Thanks to the consistent GSM Europe and Asia are ahead of the fragmented U.S. market .

• The U.S. have seen higher growth in part of the value chain, which is closer to the Internet (middleware, value-added services, content, commerce).

• Wireless “smart” phones dominate in Europe and Asia, while PDA-based wireless units are more prevalent in the United States.

Current Industry Dynamics The Global Field

Europe

U.S.

Asia/Pacific

SMS Users by Region (millions of subscribers)

Europe

U.S.

Asia/Pacific

Current SituationCurrent Situation

Future TrendsFuture Trends

• Multinational cross-border partnerships will blur geographic distinctions.

• Migration toward 3G will fuel more uniform growth globally.

• Mass market will fuel need for high capacity data transmission

Worldwide Smart Handheld Device Shipments(millions of units)

0

2

4

6

8

10

12

1998 1999 2000 2001 2002 2003

U.S.

Japan

Western EuropeRest of World

1998–2003 CAGR

32%

42%

38%

67%

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We have seen explosive growth of data traffic over wireline networks in the past 10 years. In the next five to seven years, an analogous explosion will occur over wireless networks.

Current Industry Dynamics Wireline Versus Wireless Networks Growth of Data Traffic

“The compound annual growth rate (CAGR) for wireless data from 1996 through 2003 is projected to be 35%. The market is expected to reach close to $2.5 billion by the year 2002.”

Source:Frost & Sullivan Market Research.

“Two million wireless data subscribers existed in 1997. Over 40 percent average annual growth is expected through 2002.”

Source:U.S. Mobile Data Marketplace.

Market Growth Forecasts

• Wireless will follow wireline model.• Network evolves to an IP architecture as data traffic carried

over the network increases (more than 50 percent).

KeyKeyMessagesMessages

0

50

100

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 20051990 1995 1998 2002 2005

Browser (Netscape) Technology Adoption

Client/Server Business (IT) Solutions

Mass Market ISP/e-Commerce

New Entrants Using IP-Based Networks

Incumbents Revectoring Evolution to IP-Based Networks

Incumbents Evolving to IP-Based Networks

Mass Market Voice

Micro-Browsers

Incumbents Focused on Voice

Application Enablers Business/

Commercial

Air Interface Improvements

Sub-$100 Devices

Network Improvements Lower $/MOU

New Entrants/Lead Incumbents Evolve to

IP-Based Wireless

Wireline

Wireless

Source: Nortel Networks and the Yankee Group.

VoiceVoice

Traffic Carried by

Carrier Networks

IPIPDataData

100%

100%

50%

Migration to Data in Wireline and Wireless Networks

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Opportunities in the mobile data market are immense.

Current Industry Dynamics Technology meets customers

WirelessConnectivity

PC Usabilityand Power

InternetAccess

The convergence of three strong and powerful industries is creating a flood of opportunity.

ConvergenceConvergence

Applications, once confined to large corporate infrastructure, are finally becoming available and affordable to the mass market.

Corporate/Corporate/InstitutionInstitution

BusinessBusiness

ConsumerConsumer

CustomersCustomers

The true potential has yet to be realized. The evolution of advanced content and commerce will cause this market to explode.

ConvenienceConvenience

Simple TextSimple Text

e-Maile-Mail

ContentContent

CommerceCommerce

ConvenienceConvenience

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Several technology and market barriers exist to impede the rapid development of wireless data services.

Current Industry Dynamics Technology and Market Barriers

Perceived Value to Customer

Pricing Models

Market BarriersMarket Barriers

Cost of Handheld Devices

Cost of Access

Lack of “Killer” Apps

Integration of Various Components

Data Throughput

Data Security

Device Ergonomics (Form Factor)

Network and Technology Standards

Network Reliability

Technology BarriersTechnology Barriers

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Trends indicate that most of these technology and market barriers are expected to be addressed in the next two years by several key enablers.

Current Industry Dynamics Technology Barriers Current Initiatives

ThroughputThroughput

Network Network ReliabilityReliability

Device Device ErgonomicsErgonomics

Data Data SecuritySecurity

NetworkNetworkand Technology and Technology

StandardsStandards

Integration Integration of Various of Various

ComponentsComponents

Technology TrendsTechnology Trends

GPRS, EDGE and UMTS will increase transmission speed

Network coverage and infrastructure is improving (build-out)

SIM Applications, WAP will improve the interface

Equipment and middleware providers are addressing security

WAP is becoming a standard protocol, Migration paths to 3G are developed

Bluetooth will improve connectivity

Pricing ModelsPricing Models

Cost of AccessCost of Access

Lack of Lack of “Killer Apps”“Killer Apps”

Cost ofCost ofHandheld DevicesHandheld Devices

Intranet/extranet browsing is vital to mobile work force

Prices will fall similar to the wire line industry

Devices with server-based micro-browsers cost considerably less than devices with built-in micro browsers

Providers must develop new pricing schemes

Market TrendsMarket Trends

Increased

Cu

stom

er Valu

eIn

creased C

usto

mer V

alue

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Over time, as wireless technology and the Internet have evolved, mobile data services have finally begun to penetrate the mass end-user market.

Current Industry Dynamics Mobile Data Mass Market Applications

Drivers of Drivers of Mass Market Mass Market

AdoptionAdoption

Large-Scale Use of the Internet and

Dependence on It

Improved Reliabilityand Speed of

Wireless Networks

Development ofData-Capable

Information Devices

Type of Service

e-Mail Services

Internet Access

Intranet Access WirelessKnowledge

Tex

t-B

ased

Info

rmat

ion

Ser

vice

s

News

Financial

Travel

Weather AccuWeather

Sports

Entertainment

Content Aggregators and Distributors

e-Commerce

Content

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The Wireless Value Chain

To best capture the abundance of opportunities available in this growing market, we must understand the dynamics of each value chain segment.

• What role does the segment play?

• Who are the leading participants?

• What are the most significant trends in each segment?

Key IssuesKey Issuesto Understandto Understand

CarriersCarriersAccess Access DevicesDevices

Infra-Infra-structurestructure

Telecom

CreateTechnologiesand wirelessarchitectures

PhonesPagersPDAs etc.

Provide wirelessvoice access orInternetaccess

CommerceCommerceContentContentValue-Value-Added Added

ServicesServices

Middleware/Middleware/Critical Critical ServicesServices

IT

Software thatoptimizesnetworks andBrowsercapabilities

Large range ofservices:Synchronization,Commerceenablingapplications,Documentcompatibility

Create andbundleContentfor providersProvideApplicationtools

CommonWebCommerceservices

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Today, multiple content distribution models exist – some models gain advantage of value chain disintegration, by providing more direct service

Content SourcesContent Sources

Value Chain From Content to Customer

CarrierCarrier Value Added ServicesValue Added Services

WirelessDevice

WirelessDevice

WAP-Compliant

Device

• Online Anywhere software converts Yahoo! content to a wireless format in real time

Content inWML Format

Carrier Network

and Proxy Server

(Phone.com)

Selected Network of Content Providers

• Reuters• CNN• The Weather Channel

Value-Added Information

Reseller

Customized and Packaged Data Services

• Infospace.com• Intelligent Information

Incorporated

• Converts HTML Web documents into WML, thus readable by WAP-compliant wireless devices

Web Content in HTML Format WWW

Wireless

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The wireless access device serves a critical function as the primary interface between the user and data applications.

Market Forces by Value Chain Segment Access Devices

Sharp Mobilon Tripad3Com Palm VII Sierra Wireless

Aircard 300QualcommPDQ Phone

OthersOthers

• Europe/Asia will see first devices

• Data entry methods will also need to improve

• Windows CE-based PDA will become an increasing threat to Palm dominance

• Increased competition

• An extremely large market will open up when throughput rates increase to 115 kbps and beyond

Modem DevicesModem DevicesMobile ComputersMobile ComputersPDAsPDAsWireless Wireless HandsetsHandsets

• Market will flourish since it is a compelling alternative to purchasing wireless-ready devices

• Wireless applications for nonstandard devices will begin to gain acceptance as the market continues to mature

Rocket eBook from NuvoMedia

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Palm computing has shot to the forefront of convenient, handheld Internet access products with the introduction of the Palm VII.

Target Market and ServicesTarget Market and Services Business ModelBusiness Model Strategic PositioningStrategic Positioning

Key Initiatives and Strategic DirectionKey Initiatives and Strategic Direction

• Consumer and business markets.

• Device offerings include the Qualcomm PDQ phone and the Palm VII.

• Internet access and wireless services available through BellSouth’s Wireless Data network covering 260 U.S. regions

• Revenue streams: product sales, recurring service revenues, licensing agreements and commissions on commerce transactions

• Service provided is branded by Palm (Palm.net). Service revenue potential ranges from a cost of $120 to $300 per year, shared with Palm

• First to market, solid reputation, brand name recognition

• Palm VII has a slight change in target market: Goes from “people who want to organize their information” to “people who want to access information.”

• Hundreds of content providers signed up for content provision

• Wireless manufacturers are creating wireless attachments

• Joint venture with Aether to form Open Sky – offer services nationwide over any standard

Best-In-Class Segment Players Access Device 3Com Palm Products (Palm VII)

• Connection speed is limited at 8 kbps

• Pricing structure somewhat limited in usage.

• Limited success for the Palm because of distribution only in New York. Technical, billing, customer support, and other issues need to be worked out as well.

EffectivenessEffectiveness

pdQ-800pdQ-1900

Key Success Factors

Maximize revenue streams from product sales, service, licensing and commission on commerce

Increase customer base through shift from “organize” to “access” information

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• New relationships between network operators, IPS and wireless equipment manufacturers all aiming to provide wireless access and content

• Incumbents and new entrants are racing to sign up content providers and establish relationships

The growth of wireless subscribers, coupled with strong Internet growth, are the primary drivers for the service provider market and will lead to new relationships and increased competition between carriers

Market Forces by Value Chain Segment Carriers

• An increase in Internet use results in increased air-time for service providers, and increased revenue per user.

• Ability to provide Internet and e-Commerce-based services will increase “lock-in” and reduce churn.

Opportunities:Opportunities:Internet + Internet + Wireless =Wireless =

ISPISPNetwork Network operatoroperator

EquipmentEquipmentManufacturerManufacturer

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GoAmerica is a new breed of service provider that specifically targets the mobile data market.



Key Success Factors

• Offers services to corporations carriers, and mobile professionals.

• Offers an interactive Web content service

• Service is compatible with several popular devices.

• Resells air time from AT&T.

• Acts both as a content aggregator as well as a wireless service provider and provides content aggregation services on a wholesale basis.

• Offers wireless services to traditional ISP

• Positions itself as the leading nationwide wireless ISP

• Partners with best-in-class service providers, content providers and device manufacturers such as AT&T, 3Com, BellSouth Wireless Data, and Wireless Knowledge

• Formed partnerships with Yahoo and Ericsson Wireless Solutions

“one-stop” shopping concept for nationwide wireless data services through strategic partnerships with equipment makers and content providers

Focuses on building brand image


• Reached strong market penetration for its services

• Teams up with best-in-class players to provide its services

Best-In-Class Segment Players Carrier GoAmerica

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www-Protocol Stackwww-Protocol Stack

The middleware segment includes a broad variety of software solutions, often consisting of a client/server architecture designed to optimize the mobile link.

Market Forces by Value Chain Segment Middleware/Critical Services

Illustrative

Other Server-Based Middleware

GPRS SAMA+CDMA+ IS95-B SMS Other

WAPProtocol

Stack

WAPClient

Windows CE

Symbian’sEPOC 32

Apple’sNewton

Other Device-Based Middleware(Nettech’s InstantRF, Smart IP . . .)

MicroBrowser e-Mail OtherFax

Server-Level Middleware

Network Protocol

Client-Level Middleware

Device Value-Added Servicesand Applications

Device OS

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Phone.com’s positioning as the converter of mass market phones to wireless “companions” has been a huge success.



Key Success Factors

• Offers platforms for carriers and for device manufacturers, Content, and Network Management Systems

• Software optimized for mass market wireless telephones, supports all wireless protocols, and is operating system and processor-independent.

• 2 sources of income: Serves as a bridge between device manufacturers and carriers

• Push Server technology allows for increased revenue potential

• Network management and content applications cater to carrier and developer markets, respectively

• First-to-market leader in wireless and Internet integration (Former Unwired Planet)

• Set the standard for wireless data services through its leadership of the WAP forum.

• Major competitive threats are Nokia, Ericsson, and Microsoft

• 75% of the wireless phone browser market under multi-year contracts to embed its product into new devices

• 31 global carriers under multi-year contracts, some of which are prepaid licenses

• Contracts with a lot of manufacturers to use technology in their next phone generation

Positioning as the ubiquitous standard for wireless Internet applications (creator of WAP)

Market leadership with strong penetration to all major carriers and manufactures worldwide.


• Phone.com’s unique platform is the only integrating Internet and wireless system.

• “push” data to its customers, increase customer loyalty (by reducing churn), and raise potential revenue per user (RPU) are strong incentives for carriers and phone subscribers to use Phone.com’s technology.

Best-In-Class Segment Players Middleware/Critical Services Phone.com

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Value-added software providers create applications to enhance the ease with which wireless/Internet devices function.

Market Forces by Value Chain Segment Value-Added Services

Sample Value-Added Sample Value-Added Service OfferingsService Offerings

The segment is very young and highly fragmented.

Many services, once considered value-added— such as e-Mail—are now essential.

Large device manufacturers are generally not as concerned with true interoperability as the consumer; therefore, the role these entrants play will be important.

Some device manufacturers have shown strong, proactive interest in developing these services, as evidenced by Motorola’s involvement in Starfish.

Overall, this segment will continue to grow rapidly.

SynchronizationSynchronization

Conversion of SoftwareConversion of Software

Information ManagementInformation Management

Access Software for Content Access Software for Content and Applicationsand Applications

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With its product expertise in transforming “Web content” to “wireless data” and its capability to aggregate numerous content partnerships, AvantGo is positioning itself to become a true “wireless portal.”



Key Success Factors

• Enterprise product and a free consumer service.

• Scalable solution for transferring data and applications onto handheld computers.

• Personalized content offline or wirelessly in real time—anytime, anywhere Compatible with PalmOS/Windows CE platforms

• Mobile enterprise solutions and Web-based application hosting to Fortune 1,000 companies

• Partnerships with a variety of content providers

• Free service as a promotion for business solutions

• Spearheading the Mobile Link initiative, an open industry standard for connecting mobile devices to server-based applications

• Microsoft and 3Com are investors. AvantGo serves as an independent software vendor (ISV) to both

• "wireless portal” for Palm OS and Windows CE devices, like AOL for desktop PCs

• Bundling agreements on devices from HP, Phillips, Casio, Palm Computing, IBM, and Symbol

Strives for industry leadership through high profile partnerships

Bundles e-Commerce opportunities with content channels


• 40 Fortune 500 companies use AvantGo to provide mobile information

• Supports hundreds of thousands of registered users of both Palm OS and Windows CE handheld devices

Best-In-Class Segment Players Value-Added Software AvantGo

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In today’s wireless data market, there are three main groups of companies that are providing content to all types of wireless devices.

Market Forces by Value Chain Segment Content

Information Information SuppliersSuppliers

Value-Added Value-Added Information ResellersInformation Resellers

Web Web PortalsPortals

Players

• CNN• Reuters• The Weather Channel• Fidelity

• Intelligent Information Inc. (iii)• AvantGo.com• GoAmerica• Infospace.com• @Mobile • Palm.net

Features

• Basic news, financial and weather information

• Personalized content including news, financial information, and weather alerts

• Limited content• e-Mail, calendar tools, and

targeted e-Commerce

• Yahoo! Mobile• MSN Mobile• AOL Anywhere

• Personalized content including news, financial and entertainment information

• Large breadth and depth of content

• e-Mail, calendar tools, and e-Commerce

Description

• Media and news companies that author, publish, and syndicate content

• Act as intermediaries by aggregating, customizing, and transforming Web content

• Resell content and services primarily to carriers and/or end-users

• No brand presence on the Web

• Act as intermediaries by aggregating, customizing, and transforming Web content

• Large brand presence and subscriber base on the Web

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Yahoo! is positioning itself to be the leading content provider for wireless Internet users.



Key Success Factors

• Users of Palm and Microsoft CE computing platforms

• Markets Yahoo mobile! Via Yahoo site

• Targets Yahoo!’s existing 35 million subscribers and that of its wireless partners’ (Sprint PCS, PageNet)

• “Stickiness” shall generate revenues through Yahoo online storefront and auction site

• Fees for the distribution of personalized news and content alerts to pagers and PDAs

• Personalized content and direct marketing

• First portal to align itself with a service provider to provide Web access

• Wireless partners for access to Yahoo content “anytime and anywhere”

• International expansion

• Acquired Online Anywhere, a provider of Web delivery solutions for non-PC appliances, which tackles the non-PC market

• Announced several wireless content distribution agreements: PageNet, Sprint PCS, Palm Computing

Continue to build strategic content distribution agreements with a number of wireless service providers.

Increase revenue stream by incorporating more content-driven commerce opportunities and value added services.


• Strong commitment and investment by Yahoo!

• Difficult to assess since wireless Internet access and content distribution is in a very early stage

Best-In-Class Segment Players Content Yahoo!

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With WAP as a standard and mobile Internet access growing, wireless e-Commerce is set to explode.

Market Forces by Value Chain Segment Commerce

Wireless User

Online BankingOnline Banking

• Banks will push their services to wireless users

Players

• Wellsfargo.com

• Paybox.com

• Citibank

RetailRetail• Books and CDs represent

low-cost impulse purchase opportunities for wireless users

• Expect significant wireless e-Tailing

Players

• Amazon.com

• Buy.com

• Barnesandnoble.com

Online Stock TradingOnline Stock Trading

• Discount brokerages already offer wireless stock trading

• Fidelity has teamed up with Palm to offer brokerage services

Players

• Fidelity

• e-Trade

• Mydiscountbroker.comEntertainmentEntertainment

• Showtimes.com currently transmits showtimes to Yahoo! mobile users; next step is to sell tickets

• Look for traditional ticket houses to sell tickets wirelessly

Players

• Ticketmaster.com

• Showtimes.com

Players

• Travelocity

• Expedia.com

• Biztravel.com

Travel• Ability to purchase

airplane, train, and bus tickets and reserve car and hotel reservations

Players• eBay• onsale.com• Yahoo! auctions

AuctionsAuctions

• eBay and SkyTel have partnered to provide auctioning services to SkyTel’s two-way paging customers

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Intelligent Information Incorporated is striving to make the user experience more personalized, a key success factor in this industry.

Key Success Factors


• Provides wireless personalized and customizable information and consumer e-Commerce services by creating a “wortal”

• Markets content and services to wireless carriers and media enterprises

• Revenue through the distribution of content to wireless service providers and new media enterprises.

• Value-added services to wireless carriers: customer care and billing for news services

• Cooperation with Nokia for activities focused on supporting WAP and the growing demand for mobility

• Developing local/national content

Increase number of content distribution partnerships with wireless service providers

Expand content and services to meet the immediate and high value-added needs of users


• Partnered with AT&T Wireless to provide personal news service for its digital/PCS subscribers.

• Customer base: 50% of the largest U.S. paging carriers and 8 PCS/digital cellular carriers


• Ability to customize information leads to reduced churn and increased revenue per user through longer on-phone times and more outbound calls.

Best-In-Class Segment Players Content/Commerce Intelligent Information Incorporated

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Partnership and alliances fuel the current evolution, however it is unclear how the customer can reached and who “owns” him or her

Trends and Emerging Business Models Trends

What Type of What Type of e-Commerce Opportunities e-Commerce Opportunities

Should Be Delivered?Should Be Delivered?

UserUser

Content

Who Keeps the Who Keeps the Transaction Revenues?Transaction Revenues?

How would wirelessE-Commerce be marketed?

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The new Palm model is a compelling example of how a device manufacturer can capture value in this new industry.

Emerging Business Models The Device-Centric Model

ValueValueCapturedCaptured

$600$600

$$$$

$$$$

$$$$

Retail price $10–$25 per month

mySimon and other content

providers strike deals to embed

software on Palm

Palm earns commission on

transaction

Palm.Net

mySimon.com

CustomerCustomerExperienceExperience

Customer purchases Palm VII device

User logs on to

Palm.net User compares prices and reads reviews through mySimon.com

User auctions for product on eBay

Additional potential recurring revenue stream

“Traditional” revenue stream

CommerceContentValue-Added Services

Middleware/ Critical

ServicesCarriersAccess Access

DevicesDevicesInfrastructure

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In a carrier-centric model, the carrier truly “owns all”—the service, the content, and most importantly, the customer experience.

• Customer pays carrier for network “air time” and access to content.

• Models can vary: Subscription-based, pay-as-you-go, and “free device/charge for service.”

• Carriers pay content aggregators and suppliers.

Revenue Revenue FlowsFlows

CommerceContentValue-Added Services


ServicesCarriersCarriersAccess DevicesInfrastructure

Trends and Emerging Business Models The Carrier Owns All

Wireless WWW

Select Content and Commerce PartnershipsCustomer Pays for Network“Air Time” and Access to Content

Select Content/Commerce Partnerships

40Anna Hillers

Trends and Emerging Business Models The Wireless Portal: “Wortal”

In the “wortal” business model, established Internet portals still provide free content, thus successfully owning the customer in the wireless world.

• Customer pays carrier for network “air time” (i.e., flat monthly service fee or per-minute usage rate).

• The “wortal” earns revenues from advertising and targeted marketing services for e-Merchants.

• Content is free for end-user.

WWW

Selected Content/Commerce/Applications

Pays for “Air Time” and Not Content

Wireless

Other Companies Pay for Advertisements andMarketing Services

Revenue Revenue FlowsFlows

CommerceCommerceContentContentValue-Added Services


ServicesCarriersAccess DevicesInfrastructure

41Anna Hillers

Trends and Emerging Business Models Summary

Wireless Internet++

Success?• Commitment of big players• Mobility is a customer need• 3G = ww success like GSM• 2 Mbit/sec will be needed

Bubble?• Volatile stock markets• Fierce competition• 3G = 3rd generation or third failure• Inherent fixed infrastructure, 2Mbit/sec = overkill?

The success or failure of wireless Internet will depend on the capability of all participants to offer superior value to the customer

The future of wireless technology and its impact

Technology

Transcript of The future of wireless technology and its impact