A few weeks ago, in association with Ericsson, we published the Telco Innovation Toolbox discussion paper. It introduces ten economics and strategy frameworks that will help operators to accelerate their “digital” strategies, make the right innovation investments and avoid costly mistakes. Previous four chapters of the paper were published on our blog. Today we are publishing “Asymmetric business models” and “The true value of innovation and the cost of doing nothing” chapters. For previous chapters from the report, go here. You can download the full PDF report [vm_form_download link_text=’here’ product_id=’3751′]. Asymmetric business models As OTT players put increasing pressure on traditional telco profit centers, it is tempting to see them as direct competitors. Yet they don’t compete for profits, but for control of the value chain. Mobile Internet has become an integral part of the digital services and content ecosystem. In that context, mobile operators, Internet companies, handset makers, software vendors and content providers are part of the same value network. As OTT players put increasing pressure on traditional telco profit centers, it is tempting to see them as direct competitors. Yet, OTTs do not compete for telco service revenues; instead, they compete to control key links in the digital value chain, with business models that span consumer electronics, online advertising, software licensing, e-commerce and more. Thus, competition is not symmetrical, because unlike carriers, OTTs do not bear the burden of providing mobile Internet service. Connectivity may be as important to their business model as gas to a car; yet, it’s the telcos who supply it, not the OTTs themselves. This asymmetry makes it difficult for telcos to protect the profitability of some legacy business models. In economic terms, telco connectivity complements OTT business. A complement is a product that is consumed together with another product. Demand for a product increases when the price of its complements decrease. For example, gas and cars are complements. Cheaper gas means people drive more, and car manufacturers see their business grow. Similarly, the common interest of OTT players is to drive commoditisation of the telco connectivity business. Affordable mobile broadband means that more smartphones are sold, more ads viewed, more software sold and more ecommerce sites visited. While there is a symbiotic relationship between telcos and OTTs at the connectivity business layer, the nature of asymmetry is different at the telco services layer. Because connectivity costs are paid by the user, OTT players have great flexibility in their business models. OTTs can monetise ads, downloads, analytics or acquisitions, and are thus able to price their services either free (e.g., Viber),  close to free (e.g., Whatsapp), or even less-than-free (in the case of Google sharing app revenues with operators). The vertically integrated, “all-in-one” telco business model of bundling connectivity and service costs makes it impossible for telcos to compete with free or less-than-free OTT alternatives. Telco core voice and SMS services are suffering “collateral damage” in the wake of successful OTT strategies, rather than suffering as a result of direct competition. Because of the asymmetry in telco and OTT business models, telcos should avoid investing in head-on competition with OTT services. OTTs don’t see telcos as competition, but rather as a complement to their business. More importantly, the telco digital business needs to be measured not by direct revenues, but according to whether it helps to grow and protect core telco business by increasing usage, creating user lock-in and driving subscriber acquisition. Similarly, success of Amazon’s Kindle is not measured by the number of units sold, but by content revenues and the amount of traffic to Amazon e-commerce properties. Instead of copying OTT initiatives, telco innovations should leverage unique advantages, in order to create user value that OTT players cannot match, such as localization, user targeting, privacy controls or MVNO service customization. Key questions telcos need to ask when evaluating innovation investments How does the asymmetry of business models affect your project? Does the project drive the telco core business or does it attempt to compete with OTT players head-on? Does the project incorporate unique aspects of value that OTT players cannot match (e.g., localization, user targeting, privacy controls, or MVNO service customization)? What are the complements to the telco core business (e.g., user identity management API) that if freely given will drive core telco business, attract developers or weaken OTT players? The true value of innovation and the cost of doing nothing Traditional financial tools are designed for stable market environments, but fail predictably when applied to innovation under conditions of uncertainty and rapid change, which characterizes today’s telecom market. Traditional financial tools work well when evaluating investments in capital-intensive telecom infrastructure. In such investments, future costs and revenues can be predicted fairly accurately by using traditional financial forecasting tools like discounted cash flow (DCF) or net present value (NPV). Traditional financial tools are designed for stable market environments, but fail predictably when applied to innovation under conditions of uncertainty and rapid change, which characterizes today’s telecom market. The reason for failure is that traditional financial tools systematically undervalue innovation by disregarding the costs of doing nothing, as explained in Harvard Business Review article “Innovation Killers, How Financial Tools Destroy Your Capacity to Do New Things” by Clayton M. Christensen, Stephen P. Kaufman, and Willy C. Shih. There are two “costs of doing nothing” for telco that escape the attention of traditional financial tools: The risk of non-linear deterioration of the telco business and the missed opportunity to develop new capabilities necessary for the future. Traditional telco financial tools implicitly assume that business is stable and its present state will persist into the future. In other words, if an innovation investment is not made, things will be at least as good as they are today. This is definitely not the case for telcos trying to adapt to the new basis of competition. The commoditization of core telco services and the entry of disruptive OTT players will inevitably result in the decline of the telco business. Therefore, the true value on innovation is not in improving on the status quo, but in preventing future deterioration of the telco business. The second “cost of doing nothing” is the missed opportunity to develop new capabilities critical for future telco competitiveness. It’s a common practice to evaluate investments based on marginal costs and revenues while ignoring sunk and fixed costs. I.e., investments are valued based on their potential to produce valuable goods or services based on current assets. That only makes sense when the market conditions are stable and the current telco assets are expected to retain their competitive value in the future. Let’s take the example of Rich Communication Services–enhanced (RCS-e), which leverages expensive IMS infrastructure. Marginal cost analysis makes it an attractive choice for new presence and messaging services designed according to traditional telco service models. However, according to the new basis for competition, the scalability and interoperability offered by IMS are less important than flexibility. Telcos could be better off investing in new, more flexible infrastructure better suited for experimentation with new services, use cases and business models. Due to the changing basis of competition, future success requires new capabilities that telecom operators are missing today. Marginal cost analysis, however, will systematically undervalue investment in creating such new capabilities. Incremental investments into the existing assets, such as network expansion, will always seem more attractive compared to the full costs of creating new competitive capabilities. For example, Blockbuster saw Netflix developing new models for movie delivery. Marginal cost analysis, however, could not justify building new capabilities, and instead Blockbuster continued investing in its current assets, which soon will become obsolete. Blockbuster’s 2002 press release read: “We have not seen a business model that is financially viable in the long term in this arena. Online rental services are ‘serving a niche market.’ ” Netflix didn’t have this dilemma, and for it the “niche market” looked to be an excellent opportunity. The rest is history, as Clayton Christensen explained in his Harvard Business School article on the Trap of Marginal Thinking. The challenge for telcos isn’t that OTT companies outspend them in innovation. It’s that marginal cost analysis steers telcos towards investments in capabilities that were relevant in the old basis of competition, rather than toward developing new capabilities relevant for the new basis of competition. Telcos need to consider the costs of doing nothing and invest in innovation well before traditional financial analysis shows attractive returns. They must adopt discovery-driven planning methods suited for the prevailing conditions of high uncertainty. We will introduce these methods in the following chapter. It is important to see the biases inherent to traditional financial analysis tools. The true value of innovation investment can only be seen when measured against the real costs of doing nothing, including the likely possibility of deteriorating telco business, and missed opportunities to develop new capabilities and competences. Key questions telcos need to ask when evaluating innovation investments How often do you use NPV/DCF financial tools for evaluating investments in telco innovation? Are you investing enough in developing capabilities relevant for the new basis of competition? How would you build new products for the new basis of competition, if you were a startup starting from scratch today? “Dealing with uncertainty: Discovery-driven planning” and “Ecosystem as a new distribution channel” chapters will follow next week. Don’t forget to download the [vm_form_download link_text=’full report’ product_id=’3751′]. As usual, we are looking forward to your feedback! Please leave a comment below or send us an email to strategy /at/ visionmobile dot com. #businessmodels #mobileoperators #telcoinnovationtoolbox

[We’ve just published Developer Economics 2013: the tools report. This report [vm_form_download link_text='(free download)’ product_id=’3789′]! is based on a large scale survey across 95 countries and 3,460 developers. This is the definitive guide on the app economy packed with facts and figures about the platforms, screens and revenue models that developers are using. In this edition we take a close look into the tools and services that developers use to create, monetise and market their apps, including Ad networks & exchanges, Cross-platform tools and Backend-as-a-Service.] In this article, you’ll find all key insights from the report – please give us your feedback and leave a comment below. Also – keep an eye out for more Developer Economics articles, and don’t forget to visit our newly launched Developer Economics portal! Mobile market duopolies Mobile handset Industry growing at 23% CAGR. Despite the doom and gloom circling many mobile handset makers, the industry has been on a steady growth trajectory achieving a 23% CAGR in revenues since 2009. Underlying this growth are the increasing smartphone sales that now account for over 40% of all handset sales, fuelled by low cost Android devices that are rapidly eating away feature phone market share. A game of duopolies. The 700 million smartphones shipped in 2012 are underpinned by the Google / Apple duopoly in mobile platforms which jointly commands 80% in mobile developer mindshare. This is underscored by the Samsung and Apple handset maker duopoly, which combines a smartphone market share of 46%, and accounts for 98% of handset industry profits across the top-8 handset OEMs. Excluding Apple, total handset industry profits are at 2009 levels, implying that Apple is reaping all of the added value out of the apps-based mobile computing paradigm which it introduced. In this same period, Samsung captured the remaining value by quickly transforming from a feature phone incumbent to a smartphone leader, eating away the profits of the old guard Nokia who was slow to react to the changing basis of competition – from the best phones, to the best apps. Samsung’s profit recipe. As the top-selling handset OEM in 2012, Samsung’s stellar success with Android smartphones is down to three differentiating elements: firstly in-house ownership of the most expensive hardware components, ensuring both earliest availability and lowest bill of materials. Secondly, fastest time to market in launching a new smartphone based on the latest Android software release. Thirdly, a strong Galaxy brand and marketing campaigns that differentiate Samsung from the crowd of tens of Android handset makers. Tablets are still outsold 3 to 1 by PCs, but they are expected to reach parity in the next 1-2 years. This will be a critical inflection point for the PC duopoly of Microsoft and Intel, who are seeing their once-dominant position in computing being severely disrupted by mobility, where Android dominates platforms and ARM licensees Qualcomm and Mediatek dominate chipsets. Looking for more info? Download the [vm_form_download link_text=’full report’ product_id=’3789′]! Platform haves and have nots Developers swarm around iOS/Android but keep looking for viable alternatives. Having established a dominant position in consumer markets, Android continues to lead mobile developer mindshare, with 72% of developers now developing for the platform, a 4 percentage point increase compared to our 2012 survey. iOS shows a 5 percentage point drop in Mindshare, which we attribute mostly to the influx of Asian developers showing a clear preference towards Android. Developer mindshare varies widely by region, with Android leading in Asia and Europe, while North America shows platform parity. The considerable share of mobile developers intending to adopt Windows Phone (47%) and BB10 (15%) indicate that there is still developer interest in a viable third app ecosystem. HTML is the main technology competitor to the Android-iOS duopoly. HTML is the third most popular choice among mobile developers, 50% of whom use the HTML-based set of technologies as a deployment platform (to create mobile web apps) or as a development platform (to create hybrid apps or HTML code translated into native apps). Overall, HTML is much more successful as a technology, not a platform, with Firefox OS (and WebOS before that) being the main web-centric attempts at creating a complete alternative to iOS and Android, including native platform APIs, and a means to distribute and monetise apps. HTML should therefore be seen not as competition, but rather as a complement to native platforms, and one that reduces externalities by lowering barriers to entry and exit from these platforms. Windows Phone: buy it and they will come. Windows Phone remains unchanged in developer mindshare at 21% of developers despite the very high intention to adopt in our previous 2012 survey. Developers seem to be waiting for the right market signals – a critical mass of handsets – before investing in the platform. Despite Windows Phone challenges, Microsoft has positioned Windows 8 as a tablet-too platform, and thanks to strong Windows license renewals, the company is able to reposition mobile market share figures to their advantage. BlackBerry mobile mindshare remains stable at 16%, with developers being on standby mode in anticipation of BB10 sales. Moreover, Intentshare, i.e. developer plans to adopt BlackBerry, has not subsided since our 2012 survey, indicating that the major outreach effort undertaken by RIM during the build-up to BB10 release is having some positive impact. Symbian mindshare, on the other hand, is rapidly and predictably disappearing, as is, Samsung’s Bada, despite outperforming Windows Phone sales in Q3 2012. 74% of developers use 2+ platforms concurrently, but money is concentrated in iOS/Android. At the same time, developer platform choices are now narrowing. On average mobile developers use 2.6 mobile platforms in our latest survey, compared to 2.7 in 2012 and 3.2 in our 2011 survey. 80% of respondents in our sample develop for Android, iOS or both, making them the baseline in any platform mix. Developers that do not develop for one of these two platforms generate, on average, half the revenue of those developers that do, leaving little doubt as to the concentration of power within these two major ecosystems. Most developers are iOS-first. iOS is a clear winner in the shoot-out against Android, with 42% of Apple/Google developers prioritising iOS, against 31% for Android. Several other factors come into play when making a decision on the “lead platform”, such as prior experience or local handset sales patterns, but iOS comes out as a clear winner across all platform competitive points except cost and learning curve. iOS, Android and BlackBerry are lead platforms. In our survey of 3,460 developers, iOS emerged as the highest priority platform, with 48% of iOS developers using it as the lead platform among all others. iOS, Android and BlackBerry constitute lead platforms, which are most often used as a main platform among their developers. Windows Phone and HTML are extension platforms, as they are typically used by developers to extend their app footprint into customer segments or regions not adequately covered by their lead platform. At the tail end of developer preference are Symbian, Qt, Flash and JavaME ,the “gap fillers”, now used to address all remaining market niches. HTML5 needs better native platform APIs, and development environment. HTML5 is becoming a viable alternative to native for developers working on app categories such as Business & Productivity (used by 42% of HTML developers), Enterprise (32%) and Media apps (28%).  To compete with native, HTML5 needs better native API access (35% of HTML developers), a better development environment (34%), better debugging support (22%). More importantly, optimised HTML5 devices were not seen as important as the native API access or dev environment. This leads us to conclude that HTML proponents such as Facebook, Mozilla and Google should focus on cross-platform tools and development environments on at least equal measures as they focus on full platform efforts like Facebook Platform, Firefox OS and Chrome OS. Tablets reaching developer mindshare parity with smartphones, but TVs remain niche. The majority (86%) of 3,460 developers in our survey target smartphones, while a large share of them also develop on tablets, led by iOS developers (76%) indicating the attractiveness of the iPad as a development and monetisation platform. TV development remains niche (6% of Android developers), as the hype cycle around the “Smart TV” experience is yet at a very early stage. More on mobile platforms? Download the [vm_form_download link_text=’full report’ product_id=’3789′]! The revenue haves and have nots The steep learning curve of app entrepreneurship. Developers have a lot to improve in planning their app business. 49% of developers in our sample build apps they want to use themselves, but end up generating the least revenue. The most revenue-generating app planning strategies are those that extend an app either into verticals or different geographies. To some extent, these strategies rely on an already established and successful business: apps that have been tried and proven in at least one market and are generally less risky options or “low hanging fruit” for developers. Advertising is now the most popular revenue model for apps, used by 38% of developers in our global sample. At the same time, it is the monetisation model with the least revenue per app. In-app purchases and Freemium are on the rise, having grown by 50% compared to our 2012 survey and are now used by more than a quarter of the developers in our survey. In-app purchase is now the second most popular revenue model on iOS, with 37% of developers using it, falling slightly behind Pay per download. Lack of customer understanding in lean app development. We find it remarkable that only 24% of developers in our sample plan their apps based on discussions with users, a figure which does not change with development experience or proficiency. This indicates that the bottleneck of the build-measure-learn cycle of lean development is the “measuring”, or understanding customers. This highlights the need for a frictionless two-way feedback channel between developers and users, much like what GetSatisfaction pioneered for web apps, and which now HelpShift is pioneering for mobile apps. The Developer Tools Landscape Over 500 tools for today’s app developers, designers and entrepreneurs. In the last 3 years, developers have moved from being coders, to innovators, designers and makers – and a prized customer for the 100s of firms making up the SDK economy, part of the bigger B2D (business to app developer) market. Developer expectations for tools and services have changed in the recent years due to the flurry of startups, from Appcelerator to Zong, which emerged.  App developers today have over 500 third party tools (APIs, SDKs, components) to choose from, catering to every stage along the developer journey. Developer tools, from ad networks to user analytics SDKs are a core part of the Android and iOS platform economics, and a major platform differentiator. Ad services mainstream, other tools use is fragmented. 90% of the nearly 3,460 developers we surveyed use at least one third-party tool or service, with an average of 1.47 tools used concurrently. Among those developer services that we benchmarked the most popular is ad networks and exchanges (34% of developers), reflecting the widespread popularity of advertising as a revenue model. Advertising is the most popular revenue model, while ads can also act as a promotion channel that facilitates app discovery. User analytics (28%) and cross platform tools (27%) follow in popularity with a longer tail formed by developers of crash analytics, BaaS, cross promotion networks and voice services. Google’s AdMob,  is clearly the dominant mobile ad platform, adopted by 65% of developers that use ad services. AdMob has recently expanded to ad exchange services, a move that aims to counter the threat that ad exchanges pose for Google. Second runners, each used by 12% of developers in our sample, are Inneractive, an ad-exchange/mediation service and InMobi, an ad network growing out of India to become a major player in emerging markets. Apple’s iAd service comes fourth overall with 11%, and despite being quite popular among iOS developers, AdMob is the leading ad service on iOS, used by 66% of iOS developers that we surveyed. PhoneGap and Appcelerator lead developer mindshare across 100+ cross platform tools. PhoneGap tops CPT rankings, used by 34% of developers, followed by Appcelerator and Adobe Air with 21% and 19% developer mindshare respectively. With over 100+ cross platform tools available, the choice for developers can be a challenge. Amidst differentiating features for CPTs are access to native APIs, performance optimisation and the ability to reproduce native UI elements on each platform. The user analytics duopoly: Google (69%) and Flurry (49%) are well ahead of competition. User analytics services are becoming increasingly important as a tool to optimise app engagement and reach, and act as a proxy for user feedback. User analytics services are significantly more important for iOS developers – used by 39% of iOS developers in our survey vs. 28% for Android, 25% for WP and 15% for BlackBerry. Usage of analytics serves as an indicator of the level of competition among developers on different platforms. Parse leads with 28% mindshare in Backend-as-a-Service tools but competition for second spot is heating up as BaaS rises in popularity. As mobile apps become more sophisticated, so the need increases for back-end features like managing users, introducing social features, or synchronizing cloud data. Mindshare leader Parse is followed by enterprise-focused CloudMine (11%). Sencha.io and ACS, both commanding a 10% share among developers using BaaS, are solutions that are well integrated with their corresponding development frameworks (Sencha and Appcelerator) and therefore do not directly compete with services such as Parse or StackMob. The Backend-as-a-service market is in early stages, crowded with over 30 vendors that strive to differentiate by constant innovation and additions to their feature sets – we have yet to see any service dominating the sector to the extent observed in other developer tools sectors, such as ad services or user analytics tools. TapJoy (53%) is the leader in cross-promotion network mindshare, according to our survey of 3,460 developers, with Flurry AppCircle (20%) and Chartboost (18%) following behind. Cross-promotion networks (CPNs) are used by developers both as a means for promoting their apps by means of free traffic exchange across apps, ads paid by cost-per-app-install or in some cases incentivised installs. CPNs are also used as a revenue model, for developer acting as inventory publishers. Voice APIs have not made the transition from web to mobile. While voice services cater to diverse use cases, their mobile developer mindshare is limited to single digits, as voice APIs are still tied to the developer perception of telephony, a long way from the future voice-enabled apps. Voice-enablement leaders Twilio and Voxeo have been much popular within web developer circles, with Twilio rising once in late 2011 to a top-10 API provider ahead of Facebook, as tracked by ProgrammableWeb. Yet these voice services are yet to make a major impact in mobile apps. Skype (telephony URIs) and Microsoft (speech recognition and transcription) are often used, followed by Twilio and Tropo API users who focus on conference calls, inbound/outbound calling and voice portal services. Telcos like AT&T, Verizon, Telefonica and Deutsche Telekom have also released voice APIs in 2012 in a move to extend telephony assets into new revenue-generating voice use cases. The Developer tools universe expands and consolidates. The Business to Developer (B2D) market, has seen a continual expansion in the last three years, with a flurry of B2D startups emerging to address the ever increasing developer needs. For every 1,000 app startups, there is a developer tools startup. In parallel, there is consolidation taking place via organic expansion (e.g. Flurry, Papaya expanding services organically) and via mergers and acquisitions (e.g. Appcelerator acquired Aptana, Cocoafish, Particle Code and Nodeable, Apigee acquired Usergrid and Instaops, Burstly acquired TestFlight and Flurry acquired Trestle). Consolidation to continue to 2015, led by mobile marketing and enterprise. We expect the trend of consolidation of the tools landscape to continue unabated until 2015, six years after the B2D market for apps was born, while expansion will focus only on unaddressed developer tools sectors in the post-launch phase of the developer journey. We expect two main clusters of developer tools to lead the consolidation: firstly, marketing tools, as the discovery bottleneck will only worsen as we go from 1.5M to 10M apps, and while the Apple and Google stores continue to dominate app distribution. Secondly, Enterprise Mobile Services, which are creating revenue demand for vendors to mobilise their intranets, and to allow employees to bring their own device (BYOD) to work. Unlike the consumer apps space, enterprises have a substantial IT budget per employee, and very stringent requirements for data security, identity management, backend systems integration, and support-level agreements. What did you think? Leave us a comment below – and don’t forget to download the [vm_form_download link_text=’full report’ product_id=’3789′]! – Andreas #developereconomics #ios #developertools #crossplatformtools #mobiledeveloper #Android #Blackberry #html

We’ve just published Developer Economics 2013: the tools report. This report  [vm_form_download link_text='(free download)’ product_id=’3789′] is based on a large scale survey across 95 countries and 3,460 developers. This is the definitive guide on the app economy packed with facts and figures about the platforms, screens and revenue models that developers are using. In this edition we take a close look into the tools and services that developers use to create, monetise and market their apps, including Ad networks & exchanges, Cross-platform tools and Backend-as-a-Service. Many thanks to our sponsors, media partners and the developers for making this happen.

Just before the end of 2012 in association with Ericsson we published Telco Innovation Toolbox paper. It introduces ten economics and strategy frameworks that will help operators to accelerate their “digital” strategies, make the right innovation investments and avoid costly mistakes. The first two chapters of the paper were published last week on our blog. Today we are publishing “Ecosystem Engineering” and “The modular telco” chapters. “Asymmetric business models” and “The true value of innovation and the cost of doing nothing” will follow next week.  The list of chapters can be found here. Ecosystem engineering The new basis of competition is defined by ecosystem economics, and technology is just one part of a much more complex puzzle. Platform owners run their ecosystems of users and developers by means of five ingredients and two control points. Innovation in the telecoms industry has traditionally been focused on technology. For decades, GSM, CDMA, WCDMA, HSPA, and LTE defined the competitive landscape of mobile telecommunications. With the basis of competition being scale and reliability, these technologies helped telcos use spectrum more efficiently, within the limited wireless spectrum available to them. In other words, the key competitive characteristics of mobile networks were defined by air interface technologies that increased capacity to transport ever-growing amounts of voice and data traffic through a limited wireless spectrum. The new basis of competition is defined by ecosystem economics, and technology is just one part of a much more complex puzzle. HTML5 is a perfect example of how ecosystems surpass technology. Many operators placed their bets on HTML5 as a chance to regain positions lost to mobile ecosystems. They did so without realizing that HTML5 is an enabling technology that still misses key platform ingredients. Successful application platforms have five key ingredients: Software foundations: a rich set of APIs with managed fragmentation and a toolset for creating apps Community of developers writing to the same set of APIs to spur innovation and cater to diverse use cases Distribution (reach) across handsets, operators and regions A means of monetization, such as ads or micropayments A means of retailing content (discovery, promotion, search and social) The next diagram details the five key ecosystem ingredients, their product success factors and the competences needed to bake each ingredient into the recipe. Platform owners control their ecosystems of users and developers by means of two control points. These points exist at the opposite ends of the value-chain. Firstly, platform owners control content creation by locking developers into a proprietary API. Secondly, platform owners control content distribution by gating how apps are distributed to and discovered by end users. These two control points allow platform owners to amplify the network effects by reducing friction to on-boarding of developers and users. Pitched as a killer of platform walled gardens, HTML5 in reality needs a lot of work before it can transition from an enabling technology to a complete and viable app platform, and compete in the league of Android and iOS ecosystems. HTML5 will not win on technological merit, but by creating pervasive solutions for the three key platform ingredients it currently lacks: distribution, monetization and retailing. Today, only two companies, Facebook and Google, are in a strong position to evolve HTML5 into a full-fledged platform. Both have rich sets of proprietary APIs, vibrant developer ecosystems and solutions for app monetisation, distribution and retailing in the form of Facebook Platform and Chrome Web Store. Mozilla’s Firefox OS (Boot2Gecko), which has the support of telcos, might have the same ambition, but is further behind in terms of its platform ingredients. Telcos need to move their innovation focus from technologies (be it HTML5, NFC, IMS, VoLTE, M2M or RCS-e) to ecosystems. That requires a much better understanding of how ecosystems are engineered, and how ecosystems absorb and amplify innovation This ecosystem view on innovation cannot only help to identify promising innovation opportunities, but equally important, help telcos avoid investments that lack key ecosystem success factors. Key questions telcos need to ask when evaluating innovation investments Is your innovation initiative aimed at creating an ecosystem? If so, what ecosystem ingredients will it need to succeed? How can technology-led innovation play atop of existing ecosystems to create a competitive advantage for telcos? Are all of your current innovation projects designed with the key ingredients for ecosystem success? The modular telco Contrary to Internet players, most telecom operators evolved as “all-in-one” businesses. To better understand the impact of the market disruption to telcos, it helps to visualise mobile operators as an entity comprised of three business layers: connectivity, services and distribution. Each of these business layers is affected differently by the market shift, and face very different operational challenges and competitive pressures. They also offer distinct opportunities for future growth, differentiation and profitability. Contrary to Internet players, most telecom operators evolved as “all-in-one” businesses optimised to compete based on the reliability and scalability of a small set of core services (voice, SMS, data access).  Vertical integration was necessary to provide these services with “five nines” reliability for tens or even hundreds of millions of subscribers. The all-in-one telco spans network operations, telephony, messaging, data access, user identity management, authentication and billing, as well as distribution and retail. As the basis of competition changed to “choice and flexibility”, vertical integration lost its advantage. Moreover, the lack of flexibility inherent to vertical integration has often slowed telco attempts to adjust to new market conditions. It explains why telcos lost out to smartphone and Internet platforms in the areas of location services, authentication, single sign-on, user identity, and billing. To better understand the impact of this market shift on telcos, it helps to visualise mobile operators as an entity comprised of three business layers: Connectivity business: high-speed mobile Internet access and wide area connectivity Services: telephony, SMS, content portals and other value-added services Distribution: physical and digital retail presence, consumer intelligence, customer care, telco own apps, web portals and more These three business layers are affected differently by the market shift, and face very different operational challenges and competitive pressures. They also offer distinct opportunities for future growth, differentiation and profitability. The connectivity layer is boosted by an ever-growing need for “anywhere, anytime” connectivity to billions of devices. It will remain an important part of the digital ecosystem value-chain for the foreseeable future, and is a growth opportunity for telco. The main challenge is how to avoid commoditization, i.e., a lack of meaningful differentiation, which results in competition on price and diminishing profitability. At the service layer, things look very different. The smartphone ecosystem has produced a flood of innovative OTT alternatives that cut into traditional SMS and telephony service revenues. OTT alternatives can often achieve substantial user reach and service scalability based on budgets that are considered small in telco terms. For example, in just two years Viber topped 100M users, Whatsapp has scaled to servicing over 10B text messages a day and Tango, a video-calling app, grew to 23 million subscribers in 190 countries. No less important, the business models of these companies are radically different from those of telcos. While traditional telephony is in stagnation, innovative voice solutions can present attractive opportunities for telco as we explain in later chapters. The OTT communication market continues to evolve at lighting speed. Telcos cannot compete with the pace, risk taking culture, free and freemium business models and global network effects of OTT ecosystems. Telco initiatives like Joyn and before it WAC, which were heralded as the answer to OTT threats, now look outdated and hopelessly behind leading OTT players. At the distribution business layer it is yet another story. Distribution is largely seen as a cost centre, not a new revenue opportunity, despite its strong potential to create new control points and revenue streams for telco. Apple, Google and Facebook have capitalized on the inflexibility of all-in-one telco offerings by gradually replacing key telco assets like location, authentication, single sign-on, user identity, and billing with proprietary solutions. Hindered by internal conflicts between business layers, telcos were late to market with services of their own in these areas. Lured by the promise of attracting higher-ARPU smartphone users, telcos worked hard to flood the market with smartphones at a wide range of price points. This strategy served the short-term goal of boosting the connectivity business, but at the same time jeopardized the long-term competitiveness of the service business by surrendering the customer ownership associated with authentication, user identity management and billing services. For telco innovation to be successful, the three business layers need to operate and be measured independently, each pursuing the most appropriate innovation strategies, KPIs, processes and priorities.  Applying different innovation mixes for their distinct connectivity, service and distribution business layers will enable telcos to succeed in the new basis of competition of choice and flexibility. Key questions telcos need to ask when evaluating innovation investments In which business layers do our digital initiatives operate? Are the right processes and KPIs in place to compete within this/these business layer(s)? Do the KPIs comply with industry best practices for a given layer? (e.g., scale and reliability are not appropriate when experimenting with new offerings at the service layer.) Is the innovation mix optimised for the respective business layers? “Asymmetric business models” and “The true value of innovation and the cost of doing nothing” chapters will follow next week. Don’t forget to download the [vm_form_download link_text=’full report’ product_id=’3751′]. As usual, we are looking forward to your feedback! Please leave a comment below or send us an email to strategy /at/ visionmobile dot com. #mobilestrategy #telcoinnovationtoolbox #telcos

[Chinese handset maker entrant Xiaomi is putting itself in the spotlight with impressive first year sales and innovation across hardware, services, brand and business model. Is this a promising attempt to create a new profitable handset business, following the Apple & Samsung profit recipe? VisionMobile analyst Stijn Schuermans investigates in this retelling of our relevant report.] Xiaomi (pronounced “chow me”), the upstart Chinese handset maker, has put itself in the spotlight with impressive early sales figures in its first year of existence. This article is based on an issue of Mobile Insider, a monthly publication by VisionMobile. that examines under-the-radar and forward-looking trends in mobile. Each issue focuses on a specific topic distilling the insights in an easy-to-digest 5-page format. Mobile Insider is part of Telco Economics, a range of strategy reports and workshops that deliver a 360° view on the new economics of the mobile industry and changing role of telcos in the era of digital ecosystems. The Xiaomi MI-One smartphone was released in August 2011. The second model, the MI-Two, followed in October 2012. Both models were offered at launch for RMB 1,999 (about $315) – pretty modest considering its specs and performance. The phone is mostly sold in batches online, with a pre-ordering system. A batch of several hundred thousand phones typically sells out in a matter of hours; sometimes much faster. In its first year, the MI-One sold over 3.5 million units, according to Xiaomi. A recent Tencent report puts 2012 sales at 7.2 million units and $2B in revenues. Analysts assume it to be profitable. This has led to an investment round in June 2012 where the company was valued at $4B. Xiaomi doesn’t limit its ambitions to China, either. The company has plans to expand to North America in 2014 or 2015, according to Xiaomi spokesperson Li Wanqiang. Business model innovation is a sine qua non The company is entering an extremely competitive market. As we explained in the April 2012 issue of Mobile Insider – Apple and Samsung’s profit recipe – the handset industry is fast approaching non-sustainability. The commoditization pressures instigated by Android and a near profit duopoly by Apple and Samsung (the innovator and the vertically integrated follower respectively) deprive the other OEMs of oxygen for innovation and investment. The emerging Chinese market in which Xiaomi is launching is price sensitive, and the rivalry among handset makers, both local (Shanzhai) and international, is fierce. Smartphones have become easy to copy. Advertising spends for new handsets run into the billions and distribution is mostly locked by powerful and demanding telcos. If Xiaomi were to compete head on with its established rivals, who have deeper pockets, established brands, supply chain power and much more experience, its chances seem pretty bleak. So how has this startup managed to draw attention? We ended the Apple & Samsung Mobile Insider issue on a positive note: a duopoly can be avoided by companies that innovate to create a unique business model. Xiaomi is doing exactly that. It is using similar strategies to the ones described in VisionMobile’s Telco Innovation Toolbox to create a uniquely tailored value chain for its customers. Xiaomi is certainly off to a flying start, at least in sales. Its profitability is still unproven, and since it is a private company, we’re not likely to get confirmation on its profit story any time soon. Its strategic outlook is good, however. In the following paragraphs, we will describe several aspects of its strategy. While none of these elements are new or unique by themselves, as a whole they create a unique value chain, tuned to deliver value to Xiaomi’s target customers. Xiaomi’s strategy dissected Xiaomi is not just a hardware producer. Its products combine the assembly of hardware with software (a custom Android user interface called MUI), services (notably an instant messaging client), a large gamut of accessories and its own online sale channel, through which the majority of phones are sold. Unlike Samsung, Xiaomi focuses on forward, customer-facing integration more than integration over the component supply chain. The fact that most Xiaomi phones are sold online is both rare in the industry and quite important to the company, as it gains direct access to the customer (like Apple achieves with its physical retail stores). By selling directly to the customer, Xiaomi also disintermediates the telco distribution channel (like Dell did with PCs in its early days). While the integration is not yet as extensive as Apple and Samsung, Xiaomi has clearly got the right idea. While handsets are clearly Xiaomi’s core business, they are not the main profit center. Instead, the hardware devices are used as complements for other products and services. Handsets are sold at a low profit; initially even rumoured to be a loss, although recently analysts have refuted this. Meanwhile, Xiaomi creates fertile ground for selling accessories and (messaging) services, which presumably have much higher profit margins. This strategy strongly reminds of Amazon and its Kindle Fire (covered in the October 2011 Mobile Insider: “The Kindelization of Tablets”), or even of Blackberry with BBM in its glory days. As handsets are a complement and not a main part of the value proposition, Xiaomi strives to produce them at low cost, but acceptable quality. Like Apple (but very few others), it has a limited model strategy, which reduces complexity and gives Xiaomi more leverage (through higher volumes) in its supply chain. Xiaomi sells phones in discrete batches, with pre-ordering. When a batch is sold, literally hundreds of thousands of handsets are sold in a matter of minutes. Not only does this create artificial scarcity (which drives demand), it also makes the supply chain process more manageable. It’s not likely that this technique can scale , but at the current low volumes it achieves the same goal of value chain control, without the large investment requirements (Apple owns substantial parts of the supply chain to achieve the same control). Finally, the Dell-like disintermediation offered by the direct-to-consumer, online-only sales model significantly reduces sales costs. Xiaomi phones are also available through more traditional (telco) sales channels, but at a 30% higher price. Xiaomi’s recipe: a tailored value chain According to Harvard professor Michael Porter, a sustainable competitive advantage can be gained if all the activities of the company are tailored to add value to the customer. In Xiaomi’s case, the target group are young, internet-savvy Chinese with a need to profile themselves socially. With this in mind, we can re-examine the strategies outlined so far. Xiaomi produces relatively inexpensive but good enough devices. As they are a complement, this hardware is not the most important part of the equation, so the focus is on simplicity and value for money, achieved by eliminating activities from the supply chain that don’t add value for the target group. This basic hardware can then be customized – an important social goal for youngsters – with a host of accessories, from covers to batteries in different colours. Xiaomi focuses heavily on the social aspect. The marketing is mostly word-of-mouth (and word-of-mouse), adding to a sense of community and belonging. Furthermore, one of the main selling points is a messaging app, further covering the consumer’s social needs. Messaging apps are a dime a dozen and don’t have intrinsic value, but for Xiaomi’s customers they add to the group feeling: the app is one element in a consistent story. Marketing guru Seth Godin explains that the purpose of marketing is not to impose products on uninterested customers, but to stand up as the leader of a group that has formed around an idea. He calls this community a ‘tribe’. Once you lead a tribe ,you will have their permission to sell them souvenirs. It seems that Xiaomi is building a tribe, a loyal community gathered around the brand, similar to the fan base of Apple and earlier Blackberry. This is possibly a sustainable competitive advantage. It certainly has to be built and cannot be bought or copied, and the value of a strong brand has long been acknowledged. Xiaomi’s tribe needs to be sizeable but not huge for the company to become profitable. Xiaomi doesn’t have to sell tens or hundreds of millions of devices like Apple and Samsung, they just need to be differentiated, i.e. have a uniquely tailored value chain. What do you think? Comments are welcome. Also – don’t forget to download the report. – Stijn (@stijnschuermans) #Apple #xiaomi #mobileinsider #handsetmanufacturers #samsung

Just before the end of 2012, in association with Ericsson, we published the Telco Innovation Toolbox paper. It introduces ten economics and strategy frameworks that will help operators to accelerate their “digital” strategies, make the right innovation investments and avoid costly mistakes. The ideas from the paper will be posted on VisionMobile blog in a series of blogs posts. Today we are publishing two opening chapters and the rest of the chapters will follow weekly. The list of chapters can be found here. The full paper in PDF format can be downloaded [vm_form_download link_text=’here’ product_id=’3751′]. A new basis of competition There are no silver-bullet solutions to telco disruption. Rather than focusing on quick fixes, this paper introduces a new way to think about telco innovation, with the aim of helping operators to make the right choices in their innovation investments. Let’s start with the basic question: What is the nature of the telecom transformation? Is it just about new competitors that need to be fended off? Or are there more fundamental forces at play? We think the latter. Telcos are being disrupted because the basis of competition in mobile has fundamentally changed. It has changed from “reliability and scale of networks” to “choice and flexibility of services” driven by the transition from “mobile telephony” to “mobile computing”.  The change in the basis of competition is fundamental and irreversible. Enabled by smartphone platforms and free from go-to-market bottlenecks imposed by telcos, hundreds of thousands of app developers are now able to compete for user attention and wallet share. Today, universal coverage, no dropped calls, voice quality and high-speed data connectivity are almost taken for granted in most mature markets. For more and more users, the availability of apps is becoming a primary consideration when selecting the handset. Signing up for a telco plan is increasingly viewed as a necessary cost for services that only need to be good enough to support the device. It’s like picking the car of our liking, knowing that once in a while we will have to pay at the gas station. This brings us to the conundrum the telecom industry is facing today. Providing undifferentiated voice, text and data services to smartphone users leads to a competition on price and diminishing margins. At the same time, staying in business requires that telcos keep up with ever-growing demand for data and continued investments in building wireless capacity. Investments in networks are still necessary, but they alone are no longer sufficient for profitable growth. What’s next? Harvard Business School professor Clayton Christensen recently said: “I think, as a general rule, most of us are in markets that are booming. They are not in decline. Even the newspaper business is in a growth industry. It’s not in decline. It’s just their way of thinking about the industry that is in decline.” Telecom industry too can greatly benefit from looking at familiar challenges from a new perspective. Telecom is a booming industry with ever-growing demand for mobile data and rising numbers of subscribers. But the basis of competition in mobile has changed putting pressure on legacy telecom business models. Wireless networks alone can no longer guarantee profitable growth for telecom operators. Competing head-on with asymmetric business models of OTT players won’t help either. Instead, seizing the full potential of this booming industry means leveraging mobile digital ecosystems to create meaningful differentiation and lock-in to telco services, as well as incremental revenues. This requires an understanding of ecosystem economics, development of new organisational capabilities and resetting the KPIs for “digital” initiatives. The economic and strategy tools introduced here will guide telcos in their choices on what innovation initiatives they should pursue and how to execute on their choices in fundamentally new market conditions. We describe ecosystem economics in the context of telco business in chapters 1 to 4, discuss the impact of traditional financial tools and the need for new innovation processes and KPI in chapters 5 and 6, and finally suggest how to leverage ecosystems to the benefit of the telco business in chapters 7 to 10. Chapter 1: The superiority of ecosystem economics What gives ecosystems their superior growth economics, and what can telcos do about it? Telcos used to be the center of gravity in the mobile value chain, but no longer. In the new basis of competition, ecosystems like Apple iOS or Google Android have become the focal point for service creation and distribution, ironically with help from telcos in the form of device subsidies. In the space of five years, ecosystems have mushroomed to take control of what took telcos nearly 30 years to build. What gives ecosystems their superior growth economics, and what can telcos do about it? Apple, Google, Facebook, Amazon and many other Internet players are in the center of value networks connecting the core business of the platform owner (e.g., hardware sales for Apple) with an array of complements, such as developers, media, brands and telcos. As such, they are carefully designed to drive the core business of the ecosystem owner. Complements are products that are consumed with and add value to the core product of the ecosystem owner. Ecosystem economics describe how the core product (e.g., iDevices or Google ads) becomes more and more valuable, as the numbers of developers and users around it grow. Ecosystem economics are driven by network effects and lock-in. iPhone apps attract Apple users, who in turn attract more developers, who make more apps, which attract even more users, and so on. This network effect between developers and users drives the explosive growth of the iOS platform. Lock-in creates natural “walled gardens,” as users develop habits around apps, while developers are locked-in by high switching costs created by their investments into the platform. Ecosystem economics are often misperceived as simple two-sided business models, where the telco needs to profit not only from users, but also from developers. This couldn’t be further from the truth. Developers, much like any complement, drive sales of the core product, and as such need to be viewed as partners, not as a source of direct profit. For example, Apple runs a very successful consumer electronics business. About 80% of Apple’s profits in Q3 2012 derived from products running its iOS operating system. Flexibility and choice underpin the iOS value proposition — “There is an app for that,” in the words of Apple advertising. Today, the company lists more than 700,000 apps in the Apple App Store. Given that the app economy has become a multi-billion dollar business, it is tempting to believe that apps are now a lucrative multi-billion dollar content business for Apple. In reality, the company runs the App Store at just above break-even, according to Apple CFO Peter Oppenheimer and CEO Tim Cook. The App Store revenue share is an elegant solution to recover the high costs of running a thriving developer ecosystem. Given 30% revenue and the fact that Apple has paid developers $5.5B dollars, these costs amount to over $2.3B over the lifetime of the Apple App Store (as of July 2012). App Store revenues are used by Apple to subsidise testing and hosting of hundreds thousands of free apps and billions of free app downloads — Over 80% of app downloads are free (including Facebook, Instagram, and many other apps).  In other words, the App Store is not designed to generate profits from content sales, but rather is a key enabler for the app economy that produces critically important complements driving the profits of the wildly successful iPhone and iPad devices. In most developed mobile markets, operators are playing a supporting role within the iOS and Android ecosystems. Operators take on the financial burden of device subsidies, which reduces the cost of acquiring the smartphone users — all in exchange for upselling users into higher-ARPU data plans. While telcos finance the expansion of smartphones, Apple and Google are taking over the customer “ownership” and creating strong user lock-in that surpasses that of operator brands. Ecosystems are much better at delivering choice and flexibility, the new basis of competition. This is due to their global scale and vast developer reach. Despite these adverse effects to the telco business, there is little telcos can do to roll back the clock. The ecosystem genie is out of the bottle. As iOS and Android have reached critical mass, and established well-entrenched market positions, operators need to look for ways to build unique user value atop the platforms rather than competing with OTT players. Such “over-the-platform” innovation can indeed create new revenue streams, but even more importantly it offers opportunity to create unique differentiation relative to local competitors and avoid competition on price. Opportunities for such differentiation exist in the areas where platforms are inherently weak, or have little motivation to compete. These include local presence, user targeting and reach, content recommendations and vertical B2B solutions. Over the longer term, telcos can look for ways to build parallel ecosystems, using pages from the ecosystem economics textbook. An example is M2M. It holds the potential to create a vibrant ecosystem of users and solution providers, thereby establishing strong network effects and lock-in. Telcos can become the central force in this emerging ecosystem if they learn to engineer the ecosystems to their advantage.  By looking at M2M through the lens of ecosystem economics, operators will see opportunities that are much bigger than just selling modems and data connections. Key questions telcos need to ask when evaluating innovation investments Does your initiative compete with the network effects of an established ecosystem or is it leveraging those effects? Does your project aim to add value where platforms are weak or have no motivation to compete? Does your project promise to create a parallel ecosystem where telcos will play the dominant role? Chapter 2 “Ecosystem Engineering” and Chapter 3 “The modular telco” will follow next week. If you can’t wait until then, you can just download the full report in pdf format [vm_form_download link_text=’here’ product_id=’3751′] As usual, we are looking forward to your feedback! Please leave a comment below or send us an email to strategy /at/ visionmobile dot com. #Android #ecosystems #ios #telcos

[This has been a great year for the VisionMobile blog, with tens of great articles, as well as some amazing infographics and reports. As 2012 draws to a close, we’d like to do a roundup of our blog and present the top 10 articles. Hope you enjoy them!] So, without further ado, here are the top 10 articles for 2012: 10. Why some publishers are abandoning apps and betting on the Web 9. Ambient intelligence: how well does your phone know you? 8. 100 Million Club – Top smartphone facts and figures in 2011 7. Cross-Platform Developer Tools 2012 6. The Dead Platform Graveyard: Lessons Learned 5. The Kindelization of Tablets, Part 2: The Silk Strategy 4. [Infographic] The Rise of the New App Economy 3. Fashion Tech: how retailers are accelerating the app phenomenon 2. Which apps make money? 1. [Infographic] The Mobile Industry in Numbers These were the top 10 articles for 2012, hope you enjoyed them! Thank you for helping us make the VisionMobile blog one of the most successful analyst blogs – see you in 2013! Happy Holidays! – Matos (@visionmobile) #ios #ambientintelligence #infographics #Android #mediapublishers #Blackberry

We’ve just published our latest report, the Telco Innovation Toolbox. You can download it for free at: https://www.visionmobile.com/product/telco-innovation-toolbox-report/ Telco Innovation Toolbox showcases 10 economic models on how Telcos can manage disruption and reinvent themselves. This report, produced in association with Ericsson, disseminates critical issues for Telcos, such as the OTT landscape and asymmetric business models, explaining how your company can make the right innovation investments and avoid costly mistakes.

[The explosive growth of app ecosystems is creating serious bottlenecks in app discovery that only popular apps can overcome. Having 700 thousand apps is great for platform vendors, but not so great for developers, whose apps are lost in the heap. Andreas Pappas takes a look at the app discovery problem and considers whether social discovery is a better solution than the alternatives available today] This article is also published in our newly launched Developer Economics Portal – where you can find more solutions to the app discovery issue. One of the greatest marketing challenges facing developers is being discovered, i.e. breaking through app store congestion and in front of user eyeballs. With Google Play and App Store now reporting over 700 thousand listed apps, browsing through these is ineffective, if at all possible. In fact, large app stores and the entire mobile application space are increasingly resembling the web when it comes to discovering content: it’s a jungle out there. App discovery is a challenge for both publishers and users. However, their incentives are often misaligned: publishers want their content in the field of view of every potential customer while users want their field of view clutter-free and occupied by what’s relevant to them. Balancing these incentives is tough. As always, when there’s a problem, there is an opportunity: app-store independent discovery platforms are vying to solve the discovery problem, providing a variety of discovery methods (e.g. daily deals, cross-promotion) for both publishers and users. These platforms often have to compete with or challenge native app-store mechanisms and policies as in the case of incentivised downloads. The app-store is a storefront: it’s designed for users, not developers Developers have been criticising app stores for lack of innovation in app-discovery. Apple’s redesigned app store has attracted mixed feedback. Some publishers have been complaining about the removal of lists that previously allowed quick browsing through apps. The way apps are presented among search results in the most recent version of the App Store only shows one app per page, casting most apps into obscurity. However, developers should keep in mind that app store curation and whatever ranking methodology and the presentation format this entails is not designed with publishers in mind. It is designed to help users discover and acquire apps, not publishers to be discovered. As Chris DeVore points out: “blaming the app stores for poor discoverability is a little like blaming Google for not putting your site on the first page of results — getting found is the responsibility of the publisher, and is as much a part of the entrepreneurial game as building a great product”. This doesn’t imply that app stores should not cater to developers’ needs since they are the cornerstone of app ecosystems. However, if there is a tradeoff to be made on the user vs. publisher prioritisation, it will invariably be in favour of the user. The scarce visual bandwidth afforded by a small screen acting as a gateway to millions of apps is extremely precious for Apple and Google: it is a storefront that vendors will use to demonstrate the ecosystem’s value to their users. Compromising the value of this storefront to users comes with the risk of losing control of the gatekeeper function. This is why Apple in particular has been repeatedly cracking down on incentivised download schemes such as TapJoy although this cat and mouse game is still going on and even large publishers rely on it as a revenue source. Third-party services to developers’ rescue but at what cost? Fortunately, there is a host of tools and services available for developers to promote and market their apps although selecting the right ones among these can be a challenge. Marketing tools include cross-promotion networks (e.g. AppCircle, Chartboost), incentivised downloads (e.g. TapJoy), vertical/specialist app stores (e.g. Happtique), reviewer networks (e.g. AppFriday), ad-networks, deals of the day services (e.g. AppGratis), recommendation services (e.g. Hooked), review sites (AppAdvice), non-native marketplaces (e.g. GetJar and carrier app stores) to name just a few. App store optimisation (ASO) aims to improve app visibility within app stores, building on the foundations of search engine optimisation. For the most part, ASO focuses on improving app curation by including relevant keywords and content that will be picked up by app store search algorithms or hand-picked by staff. There is however, another side to ASO, focusing on algorithmic optimisation, essentially boosting app downloads to a level that will place an app among the most popular in a category so that it appears in the top app store listings for the category. Bot-assisted download services are known to be used for this purpose. While some of the options mentioned are free, others come at a significant cost. For example, promoting an app via a deals site (e.g. free-app-a-day or FAAD) may set you back a few thousand dollars (up to $10,000 has been reported), the exact amount depending on what your targets are. While this could potentially generate a few 100k downloads, the ROI depends on your revenue model and conversion rate, i.e. on the ability to retain and monetise the user influx. For most developers, particularly those new to the app economy, there is a steep learning curve to climb when marketing apps, quite steeper than getting to grips with a new development environment. When it comes to marketing, one size doesn’t fit all and quite often a fair amount of trial and error will be necessary. When designing a marketing strategy the first step should be to set targets and KPIs that are in line with the business objectives and revenue model used: a few 10k downloads will not take you far when advertising is your sole revenue source. An important metric to keep track of is the cost-per-install (CPI), i.e. how much it costs to acquire a user. However, this metric must be adapted to the specific revenue model for each app: not all installs will have the same impact on the bottom line. In other words, some users are more valuable than others. If loyal users are the target, then cost-per-loyal user is what you should be tracking. Before selecting a promotion channel developers should research alternatives. On several occasions, simple, free strategies may work quite well: dropping the price of your app or making it free for a period of time is likely to be picked up by a number of sites that will then showcase your app for free. This could potentially drive downloads at a much lower or even zero CPI compared to daily-deal services. A PR campaign that targets the right media channels can also have similar effects. The user problem: Is the app store a sustainable discovery medium? It is becoming increasingly evident that app stores offer extremely limited bandwidth when it comes to app discovery. There is so much they can show and as the number of apps grows, competition for screen-space will become even tougher in the future. From a user perspective the present app store-based discovery model is showing signs of weakness and its long-term utility is questionable. To some extent this is a result of popularity-based rankings. While popularity-based discovery works quite well for mainstream apps, app ecosystems have matured to a level where the long-tail has become an equally important element of the ecosystem. Users often seek apps for very specific use-cases and a niche interest. Discovering these apps using popularity-based criteria is bound to fail. On the contrary, social media work really well for addressing discovery issues associated with the long tail. Hubbl, Crosswalk, AppFlow and AppGrooves are startups aiming to bring a social element to app discovery, while Twitter and Facebook are also well placed to leverage their scale in this area, as demonstrated by Facebook App Center. Personalised mobile app store fronts powered by the social graph can potentially provide a much better discovery experience for end-users. This is the natural step forward for Apple following the acquisition of Chomp and the Facebook integration on iOS6. Presently, the only personalisation currently provided by Genius, are recommendations based on similar apps to those you have downloaded. Google Play has also introduced basic personalised & social discovery capabilities mainly filtered by user location and choices of people who have downloaded similar apps or that belong to your Google+ circles. Amazon, having a strong background in recommendation engineering can potentially provide a much more fulfilling discovery experience, however, a scroll through the “recommended for you” category on the Amazon app store was disappointing. It is evident that major app store vendors are taking note of the discovery issues for end-users and are taking steps to provide a better user experience by integrating social and personalised elements in discovery. However, a meaningful discovery experience can only be provided if one has access to the right data such as your location, interests, groups and friends for example: there is still some way to go before Google Play will be able to recommend the right travel app for your planned trip to Bolivia or an app that will help you monitor a medical condition. Partnerships, based on social and consumer data, will be key in providing a fine level of personalisation but for app store vendors this may come at the cost of relinquishing some control over the discovery experience on the platform. For developers, a departure from the present popularity-based model to a social-based model will create better opportunities to target campaigns more effectively and acquire more loyal users. Social discovery is much a better option for aligning developer incentives with user incentives when it comes to app discovery. – Andreas you should follow me on Twitter: @pappasandreas #appleappstore #googleplay #Apple #Android #appstores #apps

[Today in association with Ericsson we are publishing a discussion paper, the Telco Innovation Toolbox. The paper introduces novel economic thinking that is the result of over 2 years of research of ecosystem economics and telco disruption and is available for free download. The paper introduces ten economics and strategy frameworks that will help operators to accelerate their “digital” strategies, make the right innovation investments and avoid costly mistakes.] The topic of telco disruption brought upon by over-the-top (OTT) players is high on telecom industry agenda. However few realize that telcos are being disrupted because the basis of competition in mobile has fundamentally changed. It has changed from “reliability and scale of networks” to “choice and flexibility of services”, driven by the transition from “mobile telephony” to “mobile computing”. The change is fundamental and irreversible. The new basis of competition in mobile The telecom industry is facing a conundrum today: providing undifferentiated voice, text and data services to smartphone users leads to a competition on price and diminishing margins. At the same time, staying in business requires that telcos keep up with ever-growing demand for data and continued investments in building wireless capacity. Investments in networks are still necessary, but they alone are no longer sufficient for profitable growth. What’s next? Harvard Business School professor Clayton Christensen recently said: “I think, as a general rule, most of us are in markets that are booming. They are not in decline. Even the newspaper business is in a growth industry. It’s not in decline. It’s just their way of thinking about the industry that is in decline.” The telecom industry too can greatly benefit from looking at familiar challenges from a new perspective. Telecom is a booming industry with ever-growing demand for mobile data and a rising number of subscribers. But the basis of competition in mobile has changed putting pressure on legacy business models. Building networks alone can no longer guarantee profitable growth for telecom operators. Competing head-on with asymmetric business models of OTT players won’t help either. Instead, seizing the full potential of this booming industry means leveraging mobile digital ecosystems to create meaningful differentiation, lock-in for core telco services and incremental revenues. This requires an understanding of ecosystem economics, development of new organisational capabilities and resetting the KPIs for “digital” initiatives. The Telco Innovation Toolbox introduces ten important economic models and strategy frameworks that will help operators to make the right choices in their innovation investments and accelerate their efforts to reinvent telco business. We describe ecosystem economics in the context of telco business in chapters 1 to 4, discuss the impact of traditional financial tools and the need for new innovation processes and KPI in chapters 5 and 6, and finally suggest how to leverage ecosystems to the benefit of the telco business in chapters 7 to 10. The full paper can be downloaded for free here . As usual, we are looking forward to your comments and feedback! #telcos #research #asymmetricmodels #ott #carriers

[VisionMobile analyst Stijn Schuermans muses about the similarities between the app economy and other businesses like FMCGs and music. What can app makers learn from other industries and how can these lessons help developers monetising apps?] In a recent post on our newly launched Developer Economics portal with facts and insights for app developers – build.developereconomics.com – colleague Mark Wilcox likened the app economy to a retail business: In the early days of relatively empty app stores, simply launching a good product was often sufficient to get noticed and soar up the store charts. However, as with any fast-moving consumer goods (FMCG) business, the value within apps has shifted from the contents (the functionality) to the packaging (the user experience) and marketing. I agree: packaging is crucial and the fight for shelf space is fierce, just like in retail. In the app business, this is called “app store optimization” (ASO). Here’s an interesting thought: with which other industries can the app business be compared, and which lessons can we apply from those other industries to make developers more successful? One industry that strikes me as pretty similar is the music industry. It too is experiencing a shift in competition: the internet has made it much easier for musicians to reach an audience. At the same time, this has undermined the traditional album-sales business model, making it much harder for musicians to make a living from their trade. Sounds familiar? Direct sales of either apps or albums is no longer a sustainable business model, or at least it can’t be relied on anymore to make a living. There’s just too much competition (700.000 apps in the app store; everyone with an instrument and some YouTube skills), including from free apps and music. Some lucky ones are still making millions, but most who try hardly make any money at all. In our Developer Economics 2012 survey, we found that as much as half of the app developers live below the app poverty line, i.e. they don’t make enough money to sustain themselves. Apps and music sales are hit-driven businesses. In the music industry, people are tackling this issue by moving to indirect sales methods: the revenue focus shifts from selling CDs to selling performances, special edition releases (direct to fan) and merchandise. The tracks themselves are often given away for free on a website or through an online music service to drive interest and discovery. Marketing guru Seth Godin has a nice way of explaining how this works: first, you create a tribe, i.e. a group of raving fans, he says. Then, you will have their permission to sell them souvenirs, for which they will happily pay a good price. The merchandise model has made its way already into the app economy. The most obvious and well know example is Rovio, the mobile-first gaming company that already derives 30% of its revenue from physical goods related to its Angry Birds hit and aims to reach 50% in a few years time. However, this is not very helpful to other app developers: Rovio is not successful because it sells merchandise. Instead, Angry Birds merchandise sells because the game was a hit in the first place. This said, all apps related to non-digital brands basically use the same model implicitly: they use apps to drive physical-goods sales. Most of those apps will be free. The money comes from the goods being retailed. I find this to be an immensely encouraging message for developers: the real app economy is a whole lot bigger than the numbers reported from paid apps, in-app purchases and advertising! Opportunity is abundant. What do you think? Which other lessons can app developers take from the music industry and others? – Stijn (@stijnschuermans) #appdevelopers #apps #mobiledevelopers #musicindustry

[Apple and Samsung are sucking the oxygen out of the room. What’s the recipe of their profits and why are all the other OEMs struggling? In this reiteration of April 2012’s Mobile Insider, VisionMobile analyst Stijn Schuermans gives insight into sustainability and profits in the handset market.] The mobile handset market is in turmoil. Since Apple launched the iPhone in 2007, OEMs have been rushing to jump on the smartphone bandwagon. Five years later, few have managed to do so profitably. Even if more companies are gaining a significant market share, only two seem to be making a profit out of it: Apple – the creator of the market in the first place – and Samsung, a fast follower. Attractive profit margins are elusive for most of their competitors. Some are toppling from their former glory (Nokia, RIM), while some newcomers seem to be gaining speed (ZTE, Huawei). But will they manage to become profitable? This article is based on an issue of Mobile Insider, a monthly publication by VisionMobile. that examines under-the-radar and forward-looking trends in mobile. Each issue focuses on a specific topic distilling the insights in an easy-to-digest 5-page format. Mobile Insider is part of Telco Economics, a range of strategy research and workshops that deliver a 360° view on the new economics of the mobile industry and changing role of telcos in the era of digital ecosystems. The state of the handset market Mobile handsets are expected to be a quarter of a trillion dollar market in 2012, with 1.75 billion units sold. Four out of ten units are expected to be smartphones, which considering their higher average selling price, will account for the vast majority (more than 85%) of the handset industry  revenues. In our recent 100M Club infographic, we provided an extensive overview of how many units each of the main platforms and vendors in the handset market ship. The biggest players don’t necessarily make the most profits, however. The table below shows the profit margins for different vendors in the first three quarters of this year, as estimated by Arete and Asymco. The most successful companies in the handset market anno 2012 are without a doubt Apple and Samsung. Apple, despite having only a handful of smartphone models, captures a substantial part of the market, and experiences strong growth (58% YoY increase in units and 56% YoY increase in revenue in Q3 2012). It also has an exceptional profit margin compared to its competitors. Samsung’s handset division accounts for more than half of its revenues and for 69% of its operating profit in Q3 2012 . Operating profit margin of the division improved to 18,8% from 13,5% a year ago. In Q1 2012, Samsung ended Nokia’s 14-year reign as largest handset maker by volume. Smartphones play by different rules than feature phones When Apple launched the iPhone in 2007, the basis of competition in mobile phones changed radically. Instead of performance of the device (hardware features like battery life or colour depth, software features like address book), the success of a smartphone now depended on the ecosystem it tapped into (i.e. apps, driving much wider use cases for the device). The success of app ecosystems is driven by network effects that create lock-in, turning them into “winner-takes-all” markets. Two dominant ecosystems emerged: iOS and Android. Any handset manufacturer that missed the Android train was left behind. Notably, Nokia failed to compete using Symbian, the dominant pre-smartphone platform, which was built for OEMs, not developers, and could not keep up in the new apps-driven ecosystem world. One other company – RIM – did have a valuable ecosystem, built on a messaging network and email synchronization. However, its value went up in smoke when the foundations upon which it was built were commoditized by OTT internet services like Gmail and WhatsApp. Mobile phone production is now a commodity Back in the day, the proprietary devices we now call feature phones followed a traditional industrial model: supply-side economies of scale were key to keeping costs down and margins up. This led to a gradual concentration of the market, resulting in a small number of dominant players, headed by Nokia. In 2008, soon after the appearance of the modern smartphone, Google launched Android, a free to use platform to build smartphones, with the explicit intention to lower barriers to entry for handset makers, and therefore commoditize the making of smartphones. Android succeeded in its goal: time-to-market decreased, development costs went down and smartphones converged into a virtually homogeneous form factor. As barriers to entry went down, many companies small and large could now make Android smartphones. This is immediately apparent in the market concentration, which plunged after 2008 as devices became more and more uniform, as shown in the chart below. Many companies are now getting a chance in the smartphone market: the amount of OEMs with more than 2% global market share went from 6 to 10 in two years time.  However, in this commodity market, market share doesn’t guarantee profitability! Apple is the innovator According to Harvard strategy professor Michael Porter, to gain a competitive advantage companies must create a unique value chain configuration. There is more than one recipe to achieve that. Apple has chosen to innovate across the chain: the Cupertino company owns its own platform (iOS), enhanced with content (e.g. apps, music, video) and services (e.g. iTunes, iCloud) and an outstanding product experience; it has a strong, tribal brand, while on the other hand its strong control over the supply chain makes it behave as a vertically integrated company, pushing costs down and appropriating profits across the supply chain. On the distribution side, Apple is the only major OEM to partially own the retail channel, i.e. Apple stores. Among followers, only Samsung has got a unique advantage As competition is based on ecosystems, beyond Apple only Android-carrying OEMs are still in the game. They are in a “race to the best device”, a race which cannot be won. Coming back to Porter, the only possible basis for profitability is a unique competitive advantage, i.e. a tailored value chain that is inaccessible for competitors and delivers value for consumers. The only handset maker apart from Apple who has built such a unique value chain today is Samsung. The electronics giant not only assembles handsets, but also makes a lot of the most expensive components, notably screens and chipsets. This allows the company to capture profits across the value chain, where its competitors can only capture the value of assembly. Samsung also has an excellent time-to-market and distribution network in emerging markets, as Javed Anwer explained in the Times of India recently. Where Samsung doesn’t own a value-adding element (e.g. the platform or the retail network), the company hedges its bets. That’s why Samsung has multiple platforms and excellent operator relationships. Samsung can then reinvest those gains in R&D (e.g. bada, handset components), marketing (the Galaxy brand) or acquisitions that strengthen the competitive advantage it already has, creating a virtuous cycle. Others left behind Samsung’s competitors either don’t have the cash to invest in a virtuous cycle (due to streaks of losses), or they have no unique value chain configuration to invest their cash in, making the spending ineffective. Nokia used to have a feature phone cash cow and strong financial backing by Microsoft, but it has divested several key value-adding elements, notable the platform, now produced by Microsoft. ZTE and Huawei are backed by a profitable network infrastructure business. For now, this money is proving ineffective at producing a highly profitable business. Money can buy high volumes and fast growth, but without a tailored value chain this growth is likely unsustainable. HTC perhaps came closest at a competitive advantage based on the HTC Sense UI and fast time to market, but this advantage is proving to be unsustainable.  In the third quarter of 2012, HTC’s net profit tumbled 79% YoY, making Q3 its least profitable quarter in six years. A duopoly emerges, or does it? The result of Apple and Samsung’s success in creating a tailored value chain, and the failure of others to do so, is that the two companies between them capture over 98% of all available profits in the handset market (smartphones and feature phones combined). In 2011, they were the top two smartphone manufacturers in volume, with a combined market share of 39% of units shipped. In the first half of this year, their combined share had risen already well above 50%. This, however, should not be mistaken for a “done deal” consolidation of the market. The smartphone market as we know it is less than five years old. While per-capita smartphone penetration in mature markets is approaching or has already surpassed the 50% point, there is still a lot of room for expansion in emerging markets, and therefore for new differentiated value propositions. We can see at least two opportunities left at the table. In mature markets, a company like Amazon could enter the smartphone market with a unique business model of subsidizing (self-branded) hardware to drive a content and retailing ecosystem. This is akin to operators subsidizing hardware to drive voice and data subscriptions, only here Amazon managed to have its own branded devices, which operators never managed to make a success. We discussed this “kindelization” opportunity extensively in volume 1 and volume 2 (year 1) of Mobile Insider. Secondly, the mobile user experience is not always tuned to emerging markets, which will be the main growth markets in the coming years. This creates opportunities for value chain differentiation, for example by tuning phones for payments (of digital goods, in shops or between people) without requiring credit cards. Next week, we’ll discuss one promising attempt to create a new profitable handset business. Chinese OEM entrant Xiaomi is putting itself in the spotlights with impressive first year sales and innovation across hardware, services, brand and business model. Stay tuned. Conclusion The launch of the iPhone fundamentally changed the basis of competition, eliminating players without a vibrant app ecosystem (i.e. iOS or Android). Android then commoditized the production of smartphones, reducing the importance of economies of scale that had made Nokia a leader in the past and sending market concentration in a plunge. To sustain profitability in the  commodity smartphone market, OEMs need to create a tailored value chain. Apple has done so by innovating at each point of the value chain. Among all other OEMs, only Samsung has created a unique value chain configuration by integrating across hardware production and capturing profit at multiple links of the value chain. It’s no wonder that together Apple and Samsung capture more than 98% of the profits in the handset market. Feel free to comment – we’d like to know what you think. And don’t forget to download the report! – Stijn (@stijnschuermans) #google #Apple #Android #mobileinsider #mobilehandset #samsung

We’ve released our latest workshop – the Telco Innovation Toolbox which introduces the new economic thinking necessary for successful innovation by telcos. This new strategy workshop is aimed at senior executives and combines executive training with interactive goup sessions and brainstorming. Attendees will understand the impact that the new basis of competition has on telcos and will be able to apply new economic thinking to building successful innovation strategies.

[The PC processor market is very different to the mobile processor market. While the former is dominated by Intel, the mobile market has a whole host of companies participating, and Intel is a minor participant there. To understand why, VisionMobile analyst Stijn Schuermans looks at the requirements for silicon products in each market.] Two silicon markets, two silicon champions In the processor market for PCs, competition is based on performance, i.e. processor speed. In the processor market for mobile devices, companies compete based on design flexibility: the ability to tune the processor to the device’s capabilities. As a result, the two markets are structured differently. This article is based on a Mobile Insider report we published in March  2012 – you can download the report here. To start understanding the silicon market, let’s look at the production process of silicon chips. It is made up of three important stages: The design of the logic, i.e. the functionality of the chip. The design of the electronic circuits, i.e. how the transistors are laid out and connected on the chip. The manufacturing process, with a focus on achieving the highest reliability possible with a given manufacturing technology. In the PC market, Intel combines these three stages in its business model. Intel chips are designed in-house and produced in its own factories. Intel dominates the market for semiconductor products for PCs, laptops and servers with about 80% market share. The company has only one competitor in that space: AMD. On the contrary, in the mobile market, ARM on the other hand focuses on the first stage of the production process. It’s business model is to license out intellectual property – logic building blocks that ‘fabless’ chip makers such as Qualcomm, Mediatek and many others can use to design the circuit itself. The chip is then manufactured by a third party. The market leader in manufacturing is TSMC. Today, as much as 95% of mobile phones contain ARM-based processors. As mobile device sales start to overshadow PC sales, Intel needs to enter the mobile market to survive. As such, Intel needs to start competing on flexibility. As a vertically integrated organization, Intel will struggle to adjust to the horizontal industry structure in mobile, currently championed by the ARM ecosystem. From performance to design flexibility For a long time, performance (measured by the speed of the processor) was the main driver in the PC market. The players that achieved the best performance are the ones that integrated the entire production process, from logic design over circuit design to manufacturing, which was exactly how market leader Intel became dominant. In mobile, raw performance was less of an issue as phones used to be simple devices relative to PCs. Therefore the basis for competition was different for PC and mobile processors. To create a wide range of successful mobile devices across diverse price points, you needed above all design flexibility. With flexibility as the main driver, a modular industry structure emerged. The market was split in three layers: suppliers of intellectual property like ARM, chip designers like Qualcomm and Mediatek, and manufacturing specialists like TSMC. ARM’s ecosystem play The horizontal structure of mobile silicon is possible because the market organized itself around a single architecture: today ARM technology is powering processors in the vast majority of mobile handsets. ARM emerged as the leader because the company managed to build an ecosystem of building block providers (the blocks use ARM bus technology to communicate with each other), chip manufacturers, OEMs, operating system providers, and even software providers. Even though ARM is roughly ten times smaller than Intel in terms of market capitalization, the Cambridge-based company manages to have similarly high margins. Its business model of intellectual property licensing creates a unique configuration of the value chain. The convergence on a single instruction set has created a winner-takes-all market in both Intel’s and ARM’s case, from which both companies derive their competitive power. Flying under Intel’s radar The ecosystem around the ARM architecture in the mobile market has reached critical mass in a protected environment, shielded from the attention of Intel. Its main selling point – performance – has been largely irrelevant in mobile. The silicon giant had an ARM-based family of chips in the past, called XScale. Even though Intel was well aware of the technology, it underestimated the future importance of the mobile market. In a classic move of an incumbent about to be disrupted, Intel made the perfectly rational decision to prioritize the higher-margin Pentium chips in its capacity-limited production lines, foregoing the opportunity to make XScale truly competitive in the market. In the end, Intel gave up on ARM-based chips and sold the XScale line in 2006 to the Marvell Technology Group. Exits from less-profitable segments that are none-the-less critically important for the future are a classic but fatal pattern of companies being disrupted. A disrupted future for Intel As the PC market is stagnating, the future of personal computing is based on mobile technology. Intel will find it extremely difficult to establish its place in the flexibility-driven mobile market, where margins are lower and there is firmly entrenched competition enabled by ARM technology. On top of that, the ARM ecosystem will start sucking customers out of Intel’s own market, as performance of PC and even server processors becomes good enough for end users. A perfect example of this is Microsoft’s decision to make Windows 8 available on ARM-based processors as well as Intel’s x86 architecture. Intel will likely be the manufacturer of choice for high-end PC and server processors for a long time to come, but the company’s overall growth will be curtailed by competitors coming from the mobile ecosystem. With Microsoft breaking the ranks and supporting ARM in Windows 8, Intel’s insistence on pushing x86 architecture in its mobile products makes less and less sense. Some may say that Intel can make better performing chips by tightly integrating its x86 architecture with Intel’s chip manufacturing process. While such integration is a strong advantage in PC market, tight integration between processor architecture and manufacturing process is of much lesser importance in mobile — the market where modularity and flexibility trump performance. Business model over technology Intel’s limited potential for growth in mobile is not due to low power technology, as ARM might have you believe. A focus on power consumption is a necessary but not sufficient condition for making chips in the future – one that Intel will be perfectly capable of achieving. It is rather the company DNA of Intel (the margins required and its vertically integrated structure) that is ill-suited to win in a fundamentally changed competitive space characterized by different basis of competition and an incompatible value-chain. The same scenario plays out in other areas of mobile The same disruption patterns are playing out among OEMs (where Android is the disruptor) and in the telco world today. Telcos and OEMs should heed these lessons and re-invent themselves to compete in a changed reality. Handset OEMs The battle between Intel and its ARM-enabled mobile silicon competitors follows the same classic disruption patterns we currently see in mobile platforms. The arrival of iOS and Android caused a fundamental shift in the value chain. Where before consumers would select a phone based on technical specs and feature set, i.e. “performance”, the advent of app ecosystems has commoditized handsets. All smartphones are now pretty much the same; mostly a big touch screen. Consumers in most cases no longer choose an OEM brand, but an operating system, based on the flexibility (the apps) that this platform promises. Android takes the role of ARM: a freely licensable piece of intellectual property that underpins the majority of mobile devices. Stay tuned for next weeks’ blog post, in which we’ll investigate the shifts in the handset industry in much more detail. Telcos Mobile platforms affected handsets, but also carriers. Like Intel, the power of operators used to be based on performance (of the network, in this case). And like Intel, operators are now threatened in their core by horizontal players who appear from outside the traditional telco value network, with business models that are completely foreign to the telco world, based on strong ecosystems that cater to a wide range of use cases. Since the basis of competition has moved from network performance to flexibility and diversity, telcos need to learn the lessons of disruption and re-invent the telco business: modularize the business by unbundling, or be pushed out by competitors who do. VisionMobile’s Mobile Innovation Economics workshop offers a deeper analysis on how telcos need to “unbundle” to innovate. Also – download the full Mobile Insider report – and let us know what you think! – Stijn (@stijnschuermans) #chipsetvendors #chipsets #ARM #qualcomm #mobileinsider