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Business models for mobile services
Business models for mobile services
Sami Kettunen (presented and modified by Jups)
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© 2001 Republica Corp.
Republica Corporation in ShortRepublica Corporation in Short
• Republica Corp. www.republica.fi • FOUNDED: 1996• NUMBER OF EMPLOYEES: 70 (5/2001)• OFFICES: Helsinki, Jyväskylä• BUSINESS: e- and m-business infrastructure software.
Four software products ready to ship, first implementations 6/2000
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Republica Corporation in ShortRepublica Corporation in Short
• MAIN PRODUCT: X-Fetch Suite;XML&Java component and agent based e- and m-business infrastructure suite including• X-Fetch Agent Server• X-Fetch Wrapper• X-Fetch Unifier• X-Fetch Performer
• IPR:Patents pending on the key areas of XML-based content aggregating and XML->application parsing
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What are mobile services?
• Services that you can use with mobile device– Mobile – European sight (mobile phones, PDA´s)– Wireless – US sight (PDA´s)
• M-commerce– Mobile commerce is all kind of commerce where
communication, transactions or consuming is done with mobile/wireless device
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Mobile Evolution
Year 1990 Year 2001
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Markets are growing?Mobile penetration
•Germany
•Spain•UK •USA
•Sweden
•Finland
•France
•Denmark
•Italy •Norway•Austria
•Switzerland•Netherlands•Japan
0 10050
100
50
Internet usage penetration
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Communication
Wireless business
applications
Value-added services
Mobile entertainment (infotainment)
Commercial Functions
(Transactions)
Directory Services News and info services
Community applications
Icons, ring tones, games
Profiled content Mobile intranet 3rd party commercial apps
Dozens of other applications
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Mobile commerce
• Three main categories– B-to-C – Internet-services– B-to-B – Extranet-services– B-to-E – Intranet-services
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B-to-C 1/3
• Communication – SMS, chat
• Information services (SMS, push and pull)– One message/order (weather info)– One month (business news)– Limited time (Neste Rally Finland)
• Targeted mass communication and advertising– Group SMS for consumers (with permission, opt-in)– Case Add2phone and snowboarding
• Alarm– Stock prices (high-low)
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B-to-C 2/3
• Reminders– Time based reminders – once a month/year
• Community services– Mobile buddies, group SMS
• Personalization– Logos, icons, picture messages, screen savers
• Entertainment– Horoscope, biorythm, jokes, games, chat
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B-to-C 3/3
• Financial services (WAP)– Stock broking– Bank services (pay your bills)
• Internet/mobile based games– Finland vs. Sweden ‘war’– Habbo Hotel chat community
• Location services– Where is the nearest gas station, and/or what is the
price
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B-to-B 1/2
• Open your databases for your customers– Mobile extranet– Based on real extranet – same authentication– WAP or SMS based
• Alarm services– Supply chain management (low amount of raw
material)– Error information (network down)– Risk management (time to call maintenance)
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B-to-B 2/2
• Reporting – Usage reports (today you used 1 000 tons of oil)– Follow up info (electricity stock info)
• Configuration– Use website to adjust your tractor– Adjustments will be sent to the tractor via OTA-file
(Over the Air) – Case Valtra
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B-to-E 1/2
• Databases/Intranet services– Address book, CRM, ERP, management reporting,
alarm systems
• Email, calendar, resource calendar• Reporting systems
– Work allocation and follow up, logistics follow up
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B-to-E 2/2
• Information– Push-info for target groups– Desktop SMS– News feed from own markets
• Location services– Logistics follow up– Emergency situations – where is the next service
person?– Radiolinja and health organisations tested this in
Helsinki region – how to find nearest ambulance?
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Social services
• Home care - trials, some succesful– The home helpers make orders with communicators
from the residense of the elderly
• Health care - still to come– Call centers– Health data from everywhere any time
• keyed in• sensored
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Authorities
• Some opinions in favour of closed official networks– extra features
• recording, tracking, locating, securing• EMP-resistance
• Fines for speeding– SMS used by the Finnish traffic police
• retrieve speeder’s gross income from tax databases• The Finns got 30% richer in one night!!!
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How to make money with mobile solutions?
• Operators are winners– Developers and content providers accuse operators having
too high comissions– Consumers are not willing to pay 5 FIM/message
• Are consumers ready to pay?– Time management– Time wasting
• People with company phone use value added services• Corporate users – office tools
– Email, calendar and information services• Mass market entertainment services
– TV Chat, icons, ringtones, chat, dating services, community services, group messages, games…
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ProblemsProblemsProblems
ProblemsProblemsValue Chain of Mobile Markets
TechnologyPlatformVendors
Infrastructure& Equipment
Vendors
ApplicationPlatformVendors
ApplicationDevelopers
ContentProviders
ContentAggregators
MobilePortal
Providers
MobileNetwork
Operators
HandsetVendors
MobileService
Operators
Customer
Operating systemsand microbrowsers(Openwave, Nokia,Ericsson, Microsoft)
WAP, HSCSD,GPRS, EDGE,UMTS (Nokia,
Ericsson, Siemens,Motorola, Lucent)
Middleware and standards
(Nokia, Phone.com,Ericsson, ETSI,WAP Forum, UMTS Forum)
Mobile platformapplications
(Yomi Vision,Akumiitti,
Dr. Materna,Add2Phone)
Content(Reuters, CNN,
Yahoo,Kauppalehti,SM-Liiga...)
Contentaggregation
(Digitallook.com,Sanoma-WSOY)
Applicationaggregation(Radiolinja,Sonera Zed,
Telia MyDOF,T-D1@T-Online,
BT Cellnet Genie)
Operators(Vodaphone,Sonera, Telia,
Orange, Mannesman,Telenor....)
Value AddedServices
(Saunalahti,Buumi.net,
Keltainen Pörssi,Alma Media/MTV3.fi)
Handsets(Nokia,
Ericsson, Motorola,Philips, Microsoft...)
Handset andSIM Retailers
Retailers(Mäkitorppa,
Setele, Tietopuhelin,
Luurikauppa...)
Based on Mobile Commerce Report, Durlacher
Various
forms
of support
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Operators Value Chain
Hostingapplications and/
or third-party portal
Terminal vendor
Customer
Subscription/access fee,Servicecharge
Pays for hosting/portal service
Bulk handsetpurchase
Retailerse-commercemerchants
Big portal player,eg. AOL,
Yahoo! etc
Site fee
Banks/financialservice
providers
Content provider
Site fee
Mobile operator
Handsetsubsidies
Site fee
Cut of transaction
Advertiser
Pays site fee
And/orrevenuesharing
And/orRevenuesharing
Lähde: Ovum
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Pricing of mobile services
• Monthly fee – flat rate– News service – 50 FIM/month
• WAP-SOLO – 4 mk/month + data connection
• Transaction fee – pay only when you use– Ringtone – 5-10 FIM/download– Chat – 5 FIM/message– Vote in TV program – 3,50 FIM/vote
• Time based fee– Start fee (0,60 FIM) + 1 FIM/minute
• Free service – paid by advertisers
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Mobile software – pricing models
• How mobile start-ups and others valuate their software
• Fixed price– One time licence fee
• User amount based pricing– Registered users – XX USD/1000 registered users– Weekly visits in the site– Step by step pricing
• Revenue sharing (risk revenue sharing)– 10-50% from the client fees
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Value chain of mobile services
Contentprovider
Contentpackager
Operator/ISP
Customer
Contentprovider
Gramex orother
AdvertiserTechnicalintegrator
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Value Chain and Money in B-to-C
Operator/ISP
Customer
- 5 FIM1,5 FIM 2 FIM 1,5 FIM
Operator/ISP
Customer
- 5 FIM
1,5 FIM 2 FIM 1,5 FIM
Advertiser
Contentprovider
Contentprovider
Contentpackager
Contentpackager
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Value Chain and Money in B-to-C
Gramexor other
Operator/ISP
Customer
- 5 FIM
4 FIM
1 FIMContentprovider
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“Literary and artistic works“in the Net
WorksThe IPR owners
can decide upon using and
performing the works in the net
IPR ownerswriters, composers, artists,
performers, AV-producers, etc.(The representatives maintain
register of works:Gramex, Teosto, Kuvasto, Kopiosto)
Service providersUtilize the works in creating content:
Responsible for the protectionFees to the IPR owners(their representatives)
OperatorsArrange the channels and data transfer
- no fees, no responsibility
Public instutionsLibraries, archives, universities
Compensate internal use (low rates)
ConsumersBrowsing: no fees to the IPR-owners,
but to operatorsPackaged works: pays the price
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Value Chain and Money in B-to-C
Contentpackager
Customer
AdvertiserIntegrator
- 5 FIM4,8 FIM0,2 FIM
Content packager has own WAP-gateway (case Keskisuomalainen)
Contentprovider
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Operators Revenue in the Following Years
• Where they will make the revenue– Airtime 60%– End user fees 17%– Content 10%– Advertising 5%– Mobile e-commerce 5%– Hosting services 3%
Source: Ovum
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Mobile service start-ups
• No risk money available– Venture capitalists are not willing to fund mobile
technology anymore– Where is the revenue?
• Clients are not investing– Operators are not investing at the moment– 3G licence and network costs are huge– When they are going to buy some applications?
• Bankruptcy?– Many players will go down
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How Technology Will Change?
• Faster networks and handsets– Fast access– Allways on connection– Better software in handsets
• Java Card –technology– You can download software to you
handset
• Smart House –concepts– Always with you - manage your house with mobile
phone
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Source: Durlacher
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Thank you!
Questions and discussion
[email protected]+358 40 3011 135
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