Why Mobile Operators have a crucial role to play in the second wave of “smart” apps
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[Just how smart can mobile apps get? Guest author James Parton explains why most apps today are pretty much dumb, just scratching the surface of what could be possible and describes how mobile operators can help power the next-generation of smarter, context aware applications]
The noise level around Apps and App Stores has reached saturation point. Every day a new launch, a new report, or a new statistic hits the newswires.
We have passed the point where there are now more people accessing the internet via a mobile device than via a PC, overall revenue from mobile apps (including ads, payments, and in-app transactions) is expected to grow to $17.5 billion in 2012 from $4.1 billion today, the iTunes store has delivered more than 3 billion downloads, 22 apps are downloaded per second from Nokia’s Ovi store, there are more than 30,000 Apps available in the Android store… you get the idea…
There can be no doubt that the explosion of interest around the App ecosystem brought home just how important mobile will be as a future content delivery channel, typified by the increasing number of Apps being produced by leading brands. No digital marketer worth their salt would now neglect having an app story in their digital marketing plan, even if in all honesty some are not quite sure why!
However, make no mistake that we are still firmly in the realms of a version 1.0 ecosystem. The App retail delivery platforms are still very basic; in fact they have not yet significantly evolved in terms of features and capabilities from the content delivery platforms that were offering mobile games, wallpapers and ringtones at the beginning of the decade.
The Apps themselves are clearly “dumb”. What do I mean by “dumb?” The vast majority of today’s App’s sit on the customer’s handset and have no understanding, or appreciation of its context or the person using it. Yes, increasing numbers of Apps are using location to introduce geographic context, but that is hardly pushing the boundaries of the art of the possible.
To take the App ecosystem to version 2.0, Apps have to become “smart”. I believe this is where Mobile Operators finally have a key role to play in the progression of the App ecosystem.
Of course this role is not a divine right. The Mobile Operators need to go through considerable change in order to be able to contribute effectively. That change is both technological: opening up “smart enablers” to allow developers to easily consume these capabilities, and secondly: culturally – to embrace the independent developer community and relax their traditional command and control philosophy for mutual gain.
So what does a “smart app” look like?
Well consider today’s customer experience. You run an app and it is a one size fits all experience i.e. the app behaves exactly the same way for every one of its users, regardless of who they are, and how they are using it. Imagine a “smart” app that could customise the user experience based on intelligent, real time, information delivered from the Mobile Operator.
Examples of Mobile Operator unique enhancements to the customer experience could include:
- On the fly customisation of the App UI based on a detailed understanding of the device currently being used. Remember that increasing numbers of customers are SIM swapping. How do you know that a customer using your service on a Monday via an iPhone is now using your service on a Tuesday using the same SIM in a 3G dongle connected to a Netbook?
- On the fly customisation of content richness based on knowledge of the users current connection speed (e.g. 2.5g, 3G, WiFi). For example trying to force rich video content to a customer on a slower 2.5G data connection will probably deliver such a poor customer experience they will never use your app again. If you know in real time their connection speed, you can deliver the most appropriate experience.
- Personalisation of content and configuration of your App UI based on user demographics (gender, age, location, social economic profile, etc)
- Targeting & profiling of the audience based on segmentation information e.g. travel profile (stationary, commuter, jet-setter), spend segment (>€100 per month, €50-100 per month, €30-50, etc).
- Micro billing to the customer’s mobile bill or debits from their pre pay balance at VISA like transactions rates.
- In-App interactivity via messaging or calling
- Up -selling the customer from a basic service to a premium guaranteed service (for example low ping rate for multiplayer gaming apps).
- Then for the owner of the App, post usage analytics providing data like who, where, how long their users are consuming their services, and other customers of the Mobile Operator that match their current users profile, who could be targeted by a marketing campaign.
Examples of the enablers that Mobile Operators could deploy include; quality of service, billing, handset information, customer analytics, network traffic analytics, messaging, call management, location, age verification, tariff information. The list can go on and on, and in fact in our own planning sessions we have identified over 50 potential enablers.
This is a more intelligent way of developing not only the App, but also the business opportunity. Via the Network Operators turning their network infrastructure and assets into a plug and play platform, Mobile Operators become vital in the creation process of the second wave of ‘intelligent’ apps that can deliver far richer experiences for users which will drive adoption, longevity, and profitability.
Evangelisation and education on the benefits of creating “smart” Apps is crucial – this won’t just happen by itself. We are at the start of the process, and many companies are only now trying to get to grips with their App 1.0 strategy.
To ensure Mobile Operators both identify and capitalise on the opportunity to become relevant in the App ecosystem, it is vital they adopt an open and transparent approach. Therefore there cannot be enough effort to bring together the various players in the App ecosystem to share thinking, create strategy and influence product roadmaps, and marketing plans.
A great example of this is the Mobile Entertainment Forums Smart Enabler Initiative. I’d strongly recommend you check it out and get involved.
Critically the experiences and enablers I have described here are not commercial reality today. Talking and listening to developers will be essential to ensure that the Mobile Operators invest in the right technology enablers and introduce compelling business models to encourage their adoption.
Of course enablers are just one piece of a complex App ecosystem. There are many other challenges that hinder unlocking the full commercial value of the market place, not least the fragmentation and choices available to developers at the handset Operating System level. However, our approach is the same: dialogue and insight.
That is exactly why O2 Litmus has partnered with VisionMobile to undertake the largest developer research to date. We’re encouraging all mobile developers to participate, and we look forward to sharing the results with you all.
Have your say at visionmobile.com/developers.
I’d welcome your thoughts on both this piece and some key questions it poses:
- Have you used a Mobile Operator enabler? What was the experience like?
- What enablers do you need to make your App “smart”?
- How can we effectively spread this message?
James Parton
Head of O2 Litmus
You should follow me on Twitter at @jamesparton
[James is a Chartered Marketer specialised in Mobile. With an award winning track record of product delivery including twenty five major launches, featuring twenty first to market achievements, including MMS, mobile video, mobile music downloads, the UK DVB-H Broadcast TV trial in 2005, and the ticketing and interactive services supporting The O2 Arena in London. Recognised by Revolution Magazine as one of the “Future 50”, James is a regular industry speaker, panellist, judge, blogger, and has lectured in Marketing and New Product Development at The University of Oxford Faculty of Continuing Education and Reading University.]
Hi James / Vision Mobile
Thanks to setup the floor to discuss about this examples of Mobile Operation enhancements to the customer experience, for several years, and I will reinforce several years big content / publishers providers within Games, LBS, Mobile Marketing, etc; has been trying to obtain permissions and willing to share rev with Operators in order to create smarter applications using many of these enhancements mentioned, like profiling & targeting, in-app up-sale; finding key roadblocks that many times are not only related to Operators old wallet garden approach, but also relate to customer privacy rules that applies on different countries.
The approach been considered based on your position as a an Operator, from my point of view will be more than well received from the developer community, is a matter then to apply the rules and explore how to manage the user profile data properly without clashing with market regulations.
Good Luck on this journey..!!
Hi James
You are spot on about this being a huge cultural difficulty for the operator to achieve these very laudable goals. But you don’t mention an even bigger cultural problem – these services need to be offered compatibly across all operators for them to have real value.
Going forward no brand is going to want to target just O2 users, or just Orange users, they need to access their demographic independent of network.
And that’s going to be difficult and slow.
Good luck with it, though, we’ve got start sometime.
rmm
Hi James,
an interesting article and I’m delighted to see that the crucial conversation between brands, the mobile content industry and the MNO’s appears now to be underway in earnest.
I’m in total agreement with your underlying premise that “smart’ apps need “smart” pipes to enhance both the user experience and retail and online brands increasingly sophisticated requirements for verifiable metrics and agile, efficient interaction with network enablers such as location and age verification to help maximise their marketing ROI in this space.
To ensure the optimal involvement of brands and their technology partners wishing to utilise this new, still immature yet potentially market-changing, technological development, will require a level of co-operation between ALL players in the ecosystem you describe, such as we have not yet seen to date.
I have no doubt that all parties involved will be working hard to achieve this, but it would be an unforgivable error if vested interests and corporate inertia contributed to the failure to capitalise on this opportunity fully, to the detriment of all. We are all aware of missed opportunities in the content and premium billing arenas over the past few years that were, in my view, in substantive part caused by an unwillingness on the part of the MNO’s to both comprehend the magnitude of the revenue-generating and customer-loyalty wins available in this space, as well as the lack of visionary leadership required to properly exploit this amazing market opportunity.
The mobile networks have a window of opportunity to take the lead in this evolutionary development in mobile by creating a network ecosystem which enables brands, technology providers and marketing creatives to deliver killer apps that go way beyond the “version 1.0″ efforts that we see on offer today.
This will help MNO’s avoid the “dumb pipe” scenario they so dread, whilst generating significant new revenues streams and brand loyalty of a kind only dreamt about today.
I shall be watching developments with interest!
All the best,
Iain Mac
Hi,
Almost everything above can be done without operator assistance.
“On the fly customisation of the App UI based on a detailed understanding of the device currently being used. Remember that increasing numbers of customers are SIM swapping” – I simply don’t believe sim swapping is on the rise – can you back that up?
“On the fly customisation of content richness based on knowledge of the users current connection speed (e.g. 2.5g, 3G, WiFi)” – No need for operator assistance on this – an app can work that out….
“Personalisation of content and configuration of your App UI based on user demographics (gender, age, location, social economic profile, etc)” – I’ll give you this.
“Targeting & profiling of the audience based on segmentation information e.g. travel profile (stationary, commuter, jet-setter), spend segment (>€100 per month, €50-100 per month, €30-50, etc).” – sounds the same as previous
“Micro billing to the customer’s mobile bill or debits from their pre pay balance at VISA like transactions rates” – I’m not convinced the operators will ever. match VISA rates. Most operators won’t even match apples 30% rev share when using PSMS.
“In-App interactivity via messaging or calling” – can be done without operator involvement – see callspark.com
“Up -selling the customer from a basic service to a premium guaranteed service (for example low ping rate for multiplayer gaming apps).” – thats pretty obscure…
“Then for the owner of the App, post usage analytics providing data like who, where, how long their users are consuming their services” – all currently available without operator involvement, through companies like flurry.com
Right now I think the best thing operators can provide in addition to the obvious things like low price, customer service, bundles and a reliable network is providing a way for app developers to market to gender, age, credit rating etc – and not through ondeck – ondeck is dead.
Firstly, thanks to all for the feedback sent to me directly, and for the people that have taken the time to comment here.
I’m glad it has sparked some debate
I totally agree that one of the biggest barriers to turning some of the concepts covered in the piece from vision to reality will be the culture and speed of execution from the MNO’s. If any of you have seen me speak you will know how acutely aware I am of the reputation & credibility issues MNO’s have to overcome with the Developer Community.
Only closer collaboration between the MNO’s, tangible deliveries and a sustained and consistent approach to Developers will change this perception.
Of course this needs to be achieved in a rapidly moving competitive landscape where the bar is raised on an almost daily basis. Developers are not going to stop and wait for MNO’s to get this right. It’s a tough challenge, but certainly one that motivates me every morning!
Keith – you are right that many of these examples can be achieved by mashing together various 3rd party offers within the native app.
I guess my point was the Mobile Operator provides the operational wrap to ensure these enablers can sustain “industrial scale” usage, are accepted by the end user (the brand & trust topic), are device agnostic, and that the network enablers are server side, in the cloud, so they minimise the impact on the developer for maintaining multiple app builds per handset platform.
Finally something I didn’t cover specifically in the article but was kind of assumed in my premise, is if we believe the mid to long term future of mobile services is delivery via the browser and not native apps, the server side network enablers from Operators become very hard to beat.
the 3g makes the most of it
DigitDiary
IMHO the only concievable future for the mobile operator industry is for them to be come more ISP-like
The model you mention (and the model that mobile operators push) is very much like early AOL / CompuServe style internet access with all that “branded” access thing and restrictions and branded software etc.
We’ve all seen how that worked (well at least globally, not sure is AOL and CompuServe are still like that in the US).
The unobtrusive, net-neutral, “we sell you access and bandwidth” ISP is the future of mobile operators. Because people are already used to internet being like that. Mobile operators aren’t really used to that but it’s just because they haven’t really dealt with serving internet access that long. Compare their voice services offers to those of landline and VoIP providers and you can see their certain future in terms of ISP-ing.
WiMax in unlicenced bands and progress of WiFi will level the playfield sooner or later, and barrier of entry for serving mobile users will lower.
It’s a cognitive dissonance between the industry and the customer. And the customer is always right… eventually. It’s just a matter of which player in a competitive market learns that first.
visionmobile 2005-2010



