Wednesday, September 8, 2010

The Search for the Killer Mobile Convergence App -September 8th

By Craig Turner
We’ve heard all about Mobile Convergence. It’s actually happening right in front of our eyes – netbooks and tablet PCs with SIM cards, mobile phones with more processing power than a mainframe from the 90s and devices that aren’t really either one or the other, but excite us with the endless possibilities of convergent functionality. However, while everybody is eager to cash in on the hype and seem all certain that this is not just a trend, but the way of the future, the number of truly successful convergent applications remain limited.

Location Based Services is a good example of a convergent area that has seen some success.

In particular, navigation has proven quite lucrative an application for several suppliers – as a stand-alone application. As navigation moves from a specialized device solution to a convergent application available on various devices, we see turn-by-turn navigation becoming a free service, with Google Maps and Ovi Maps leading the way. Premium services based on turn-by-turn hold the promise of further revenues. Beyond navigation, there are plenty of free LBS applications out there to identify the nearest ATM or fast-food joint. There is certainly an argument to be made for the value of such services in retaining customers, but they aren’t going to be the next big revenue drivers.
As with navigation and LBS applications, it seems likely that other applications dependent on convergent technologies, if successful, will rapidly pass through a brief existence as premium services to becoming commodity services expected from any smartphone platform worth its salt.

Maybe it’s mobile TV. Google TV and AppleTV might enable mobile TV, but they’re clearly looking to move successes with Android and iOS. Even then I suspect it’s not happening as a mainstream feature until we have widespread 4G access. And a killer app? I’ve seen travelers of all ages in airports or on the plane watching movies on their laptops and portable DVD players, but not very many squinting at their iPhone for 2 hours.

Other possibilities are Mobile Banking or Mobile Payment. Several authors have extolled the virtues of mobile banking lately and that it is the application of the future. However, before we get there, banks are going to have to rapidly embrace a new technology and the public as a whole is going to have to build their confidence in mobile technology as a safe medium for banking. It’ll be interesting to see if the traditional banks are able to keep up with the speed of development in the mobile industry or if they are passed by newcomers, similar to Egg (Citigroup´s online bank) showing up the British banks with their online banking offering.

Mobile Payment is a more competitive market, as the service can be provided by anybody with customer access, including examples such as Nokia Money or the well-cited M-PESA project. In fact, pre-paid cards can even be seen as small bank accounts supporting micro-savings. To reach the masses, technologies such as NFC (Near Field Communications radio protocol for very short distance and ultra fast set up time) will need to be rolled out en masse and consumers will need to be guided down a gradual transition path from inserting their credit or debit card into a machine to waving their mobile device in front of a reader. They’ll also have to grow to trust that the person behind them in the checkout line can’t scan their back pocket while they are waiting.

However, you can’t rule out that all of these apps will develop moderately, but never really take off. Instead, a social trend might drive a surprising growth of an otherwise unlikely application will suddenly find itself installed on every second smartphone as the world’s next Facebook.

Who will win? -I don’t know. But whoever it is, they will first have to understand all the wide-reaching implications of Mobile Convergence and listen very carefully to what their customers really want – no easy task and certainly not something everybody in our industry is very good at!

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