Welcome to my synopsis of the first day of Mobile Internet World – a “pre-conference” workshop addressing key technologies and trends in the mobile Internet market. l worried a bit when less than 75 people were on hand at the start of the opening session. That number doubled during the first half hour and grew some more by noon. It still wasn’t an overwhelming attendance, but I found the sessions to be very informative and thought-provoking. Key messages delivered by each speaker or panel are summarized below:

Uncorking Mobile Internet Profit (Philip Marshall, PhD, Vice President, Enabling Technologies, Yankee Group)

• New, complex business models apply to achieve profitability in the mobile Internet marketplace
• Two primary types of services exist:
  • “Best of breed applications,” that drive subscription revenue: video telephony, messaging, mobile TV, etc, which require heavy duty service delivery environments
  • “Horizontally federated Internet services,” including ebay, google, etc., that require a lightweight services distribution environment.
• A third set of services, such as security services, health care, connected home, etc., that require more reliability than traditional Internet services, but less infrastructure than best of breed applications. This may provide strong opportunity for new revenue generation.
• Key factors in adding value to services may include location, personalization and context.
• Carriers need to migrate to a business model that is more about service distribution and less about network.
• We can think of a successful service delivery model as being like the retail distribution model, where the device (mobile device or set top box) is a point of presence, much like a retail store or shopping mall.

Enabling networks in the mobile Internet (Caroline Gabriel, Research Director, Rethink Research)

• According to prior market projections, mobile data services were supposed to reach 50% of ARPU by now. It has reached only 12% – a major disappointment
• The two most important factors for profitability in mobile internet are cost per Mbps and which services will consumers adopt – high perceived value and low cost to deliver.
• WiMAX is the closest thing we have to 4G. WiMAX allows carriers to scale up as needed, rather than building a complete network and waiting for customers to come. WiMAX is currently the leading technology, but LTE is catching up.
• The handset is the most important factor in customer acceptance. It must be compelling to the subscriber. Unfortunately, there are no really good devices yet. Devices like the iPhone are accelerting efforts to create the best platform.
• Think of the device as an extension of the user. Devices and platforms will determine the success of platforms.

Mobile TV: One Last Push (Peter White, President, Rethink Research; Editor, Faultline)

• Video across the mobile Internet is very difficult. Mobile web video will not become significant for 5-6 years.
• Many competing standards are in play. DVB/H is the current leader, although MediaFLO is growing. The current Nokai/MediaFLO ligitation will play a large role in adoption of MediaFLO or Nokia technology.
• Markets outside the US (e.g. Japan, Korea, China) favor DVB-H. The US may support multiple technologies. The technology landscape will have little clarity for several years.
• Existing network infrastructure lacks capacity to handle broad adoption of mobile video. A big question is who will invest in the infrastructure to develop it.
• MVNO’s want mobile TV. They may subsidize the rollout of video capable handsets.

Digital Children: Mobiles and the Disruptive Future (Dr. Norman Lewis, Chief Strategy Officer, Wireless Grids Corporation)

• Children and young people of today, who thrive on mobile connectivity, are the customers of tomorrow, with power to disrupt existing business models.
• Children don’t distinguish between online and offline. To them, it is just all part of normal life.
• Kids seek to establish their own Identities and reputations through participation in online activities such as instant messaging and social networks.
• Acknowledgement from others, expressed as reponse to blogs and messaging, is the currency of young people’s lives. They establish reputation through responses they receive.
• Young people are drawn to technologies that are easily personalized and used in individual ways. Social status is established and maintained through the ability to personalize new technology.
• Rather than the old information broacast model used by radio and TV, where centralized authorities determined what information would be disseminated to the masses, today’s culture centers around each individual, who chooses what media is relevant and with whom each should interact.
• Owning a particular cool device is no long the prevailing status symbol. It is what you do with that device and how you use it to interact with your friends that establishes status.
• The “holy grail” of the mobile Internet are tools that allow kids to use their mobile devices to create services they use on the Internet.
• We should delight, not delimit, the user.

Catalyzing the Mobile Industry (Bruce Stewart, Vice President and General Manager for Connected Life Americas, Yahoo! Inc.)

• This conference is indicative of the importance of the mobile Internet today.
• Mobile devices are increasingly important in our daily lives – we don’t leave home without them. These devices are always with us, they are personal and they keep us connected.
• Positive, compelling user experience, not devices or network speed, drives usage.
• The major focus areas to improve user experience are:
  • Ease of use
  • Discoverability
  • Pricing transparency
  • Openness
• Yahoo Go and OneSearch are examples of user applications that provide compelling user experience on mobile devices.
• Data plans must be simplified to accelerate user adoption.
• Openness is a key catalyst for subscribers to get what they want.
• Ad volume on the mobile Internet is still quite low. A volume of $16 billion per year is expected by 2011. Significant improvement in the process of mobile advertizing will be needed to reach this level. Service providers must deliver consumers en masse before ad agengies will pay to reach them.
• Yahoo is clearly focused on mobile advertising: “We feel and incredible responsibility to our advertizers,” and “we are incredibly tuned in” to advertising metrics.”

From Mobile Advertising to Anywhere Commerce (Boyd Peterson – Yankee Group, Andy Belt – Monitor Group)

• “A platform upon which our applications can be used in a mobile context is the Holy Grail” – Eric Schmidt, Google Analyst Day
• The mobile Internet has large, unrealized potential. About 44% of US mobile telephony customers say they would like to access the Internet from their phones, but only 6% currently do so. Current annual global services revenue (mobile data plans) is $9.5 billion, but latent revenue opportunity for mobile Internet connectivity is $66 billion.
• Personal profile information, including preference, behavior, history and presence, can enable customized interventions into the buying process – leading to high value transactions being enabled by mobile devices. This high degree of personalization of the advertising / buying process is the reason advertizers are interested in learning how to address this market.
• The “Holy Grail” of mobile Internet advertizing is a location specific, intensively interactive, user driven process.
• A “Market Zone Map” was used to show various industries that deliver value to the mobile Internet market. The “most valuable frontier” is the intersection of the wireless and Internet information sectors.
• The consumer electronics sector is driven by selling devices with a rapid, predictable upgrade cycle. They want to subvert ad-driven or subscription-driven business models so they can sell more gear.
• When consumers were asked in a poll which vendors they trusted to helping them use their mobile phone, #1 and #2 were Verizon Wireless and AT&T. Google was closely behind at #3, illustrating their prominence in the fight for industry dominance.
• The fight for dominance in the mobile Internet market is focused on who can harvest the value of services provided to mobile consumers.
• Google desperately doesn’t want to be in the last mile of broadband communications, but definitely wants to have open broadband communications. They have much to gain from open platforms.
• Carriers are making a lot of money on the status quo, and typically favor more closed platforms that keep them in control. Mobile carriers with less market share may be willing to take more risk and partner with companies like Google in order to capture market opportunities.

Learning to profit from anywhere advertizing (Panel discussion led by Ford Cappilary, Monitor Group)

• Many changes are occuring in the advertizing value chain applying to the mobile Internet. There is much consolidation of small players. Large Internet players are moving into the mobile Internet.
• Mobile advertising represents large opportunity, but is currently small.
• Generally low penetration of mobile data services is a large barrier to wider mobile advertizing.
• Advertizing metrics are critical to satisfy customer demands for ROI.
• New ways to advertize on mobile devices and measure success must be found. Current methods don’t translate well.
• The mobile device is increasingly the “first screen” a consumer refers to. Carriers are in a good position to control the “first screen.” Google is trying to make sure carriers don’t control the “first screen.”
• Carriers are at the top of the value chain and must find how to deliver value. One way would be to open API’s they control (such as location services) so others could subscribe.
• When asked “who in this room has accessed the mobile web?” everyone raised their hands. When asked, “was it a good experience?” no one raised their hand. General consensus showed that current user experience on the mobile web is abysmal.

Enabling the delivery of anywhere transactions (Panel discussion led by Berge Ayvazian, chief strategy officer, Yankee Group)

Joseph Ferra – chief wireless office of Fidelity ebusiness
Carsten Boers – president, Buongiorno marketing services US, inc.
Dan Olschawang, president and ceo, JumpTap

• Fidelity has a mobile Internet service to complement their Fidelity.com web site. Customers are increasingly asking “if I can do it on Fidelity.com, I want to do it on my mobile device.”
• Context is king in delivering services to a mobile user. Services should engage with a customer based on context – pushed to him where he is, when he needs it, based on what he needs to do.
• JumpTap is a mobile advertising company, focused on delivering results to users what they really want, when they want it.
• Customers are not looking for browsing via the mobile device. They want “customer utilities” that deliver value.
• 40-50 startups are establishing social networks for mobile phones.

The anywhere transaction model (Panel Discussion)

Jordan Berman, ATT mobility
Carrie Cypher, Conde Net
Alex Bombeck

• Conde.net is trying to build useful and beautiful functions on the phone. It was generally felt this is not done well by most applications.
• Uniqueness of targeting is the biggest factor for success in mobile advertizing.
• Advertizing should focus on how to improve the time value cycle of the purchase cycle? This is not traditional advertising, but assisting consumer in buying process.
• The mobile phone is the “remote control to your life.”
• AT&T tries to be “the consumer’s champion.” They consider what will be relevant and important tot he consumer. They try to understant how to translate existing user behaviors to the mobile phone lifestyle and try to discover new behavior that might be enabled by the mobile Interent experience.
• A big challenge is how to educate consumers about how to use the mobile Internet.
• Mobile ads should be part of an overall marketing program, not a separate silo.
• Carriers mus balance their desire to serve users with their need to serve brands who advertize with them.
• It was generally felt that market leadership in this area was the carriers’ game to lose. It is probably the biggest opportunity they have, but they may be reluctant to make necessary changes. The will need to open up so innovation will happen.
• Heavy investment in infrastructure is require to drive success in the mobile Internet.

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