I have referenced the work that the MEF has done on Smart Enablers a number of times in recent blog posts (here and here) and now MEF members can download the Smart Enablers guide direct from the MEF site, here.
I’ll also be trying to get some hard copies to hand out at upcoming Telefonica developer events.
The following post is a reproduction of my guest blog on VisionMobile.com – please see here for the original.
The noise level around Apps and App Stores has reached saturation point. Every day a new launch, a new report, or a new statistic hits the newswires.
We have passed the point where there are now more people accessing the internet via a mobile device than via a PC, overall revenue from mobile apps (including ads, payments, and in-app transactions) is expected to grow to $17.5 billion in 2012 from $4.1 billion today, the iTunes store has delivered more than 3 billion downloads, an App is downloaded every 22 seconds from Nokia’s Ovi store, there are more than 30,000 Apps available in the Android store…you get the idea…
There can be no doubt that the explosion of interest around the App ecosystem brought home just how important mobile will be as a future content delivery channel, typified by the increasing number of App’s being produced by leading brands. No digital marketer worth their salt would now neglect having an app story in their digital marketing plan, even if in all honesty some are not quite sure why!
However, make no mistake that we are still firmly in the realms of a version 1.0 ecosystem. The App retail delivery platforms are still very basic; in fact they have not yet significantly evolved in terms of features and capabilities from the content delivery platforms that were offering mobile games, wallpapers and ringtones at the beginning of the decade.
The Apps themselves are clearly “dumb”. What do I mean by “dumb?” The vast majority of today’s App’s sit on the customer’s handset and have no understanding, or appreciation of its context or the person using it. Yes, increasing numbers of Apps are using location to introduce geographic context, but that is hardly pushing the boundaries of the art of the possible.
To take the App ecosystem to version 2.0, Apps have to become “smart”. I believe this is where Mobile Operators finally have a key role to play in the progression of the App ecosystem.
Of course this role is not a divine right. The Mobile Operators need to go through considerable change in order to be able to contribute effectively. That change is both technological: opening up “smart enablers” to allow developers to easily consume these capabilities, and secondly: culturally – to embrace the independent developer community and relax their traditional command and control philosophy for mutual gain.
So what does a “smart app” look like?
Well consider today’s customer experience. You run an app and it is a one size fits all experience i.e. the app behaves exactly the same way for every one of its users, regardless of who they are, and how they are using it. Imagine a “smart” app that could customise the user experience based on intelligent, real time, information delivered from the Mobile Operator.
Examples of a Mobile Operators unique enhancements to the customer experience could include:
Examples of the enablers that Mobile Operators could deploy include; quality of service, billing, handset information, customer analytics, network traffic analytics, messaging, call management, location, age verification, tariff information. The list can go on and on, and in fact in our own planning sessions we have identified over 50 potential enablers.
This is a more intelligent way of developing not only the App, but also the business opportunity. Via the Network Operators turning their network infrastructure and assets into a plug and play platform, Mobile Operators become vital in the creation process of the second wave of ‘intelligent’ apps that can deliver far richer experiences for users which will drive adoption, longevity, and profitability.
Evangelisation and education on the benefits of creating “smart” Apps is crucial – this won’t just happen by itself. We are at the start of the process, and many companies are only now trying to get to grips with their App 1.0 strategy.
To ensure Mobile Operators both identify and capitalise on the opportunity to become relevant in the App ecosystem, it is vital they adopt an open and transparent approach. Therefore there cannot be enough effort to bring together the various players in the App ecosystem to share thinking, create strategy and influence product roadmaps, and marketing plans.
A great example of this is the Mobile Entertainment Forums Smart Enabler Initiative. I’d strongly recommend you check it out and get involved.
Critically the experiences and enablers I have described here are not commercial reality today. Talking and listening to developers will be essential to ensure that the Mobile Operators invest in the right technology enablers and introduce compelling business models to encourage their adoption.
Of course enablers are just one piece of a complex App ecosystem. There are many other challenges that hinder unlocking the full commercial value of the market place, not least the fragmentation and choices available to developers at the handset Operating System level. However, our approach is the same: dialogue and insight.
That is exactly why O2 Litmus has partnered with Vision Mobile to undertake the largest developer research to date. We’re encouraging all mobile developers to participate, and we look forward to sharing the results with you all.
Have your say at visionmobile.com/developers.
I’d welcome your thoughts on both this piece and some key questions it poses:
Dimitris Mavrakis wrote an interesting blog post on the Informa Intelligence Centre, posing the question: Network APIs moment of truth: Are there revenue opportunities?
As mobile operators wrestle to understand their role in the services ecosystem of the future, one thing is certain. The mobile operator has one unique asset; the network itself. Today the noise around operator API’s is largely contained to Telco core competencies like sending SMS messages or handling location look up’s.
Clearly these API’s represent low hanging fruit – operators understand this space, they have robust infrastructure and business processes built around the operation of these services. In the main, service providers recognise the value of a messaging transaction, and can create services that utilise these API’s to charge end users downstream, creating a two sided business model.
Where’s the problem then?
Well it’s kind of dull don’t you think? Where is innovation? How can operators become relevant and appeal to small independent software houses developing the apps and services that are driving the digital economy, when they are more familiar with the Google’s of this world, rather than working with a “dinosaur” like mobile operators?
The three hurdles to overcome for Network API Success:
1. “Operators just don’t get it”
The first problem is one of perception and behaviour. The majority of Developers hate mobile operators, many for good reason. Developers question why operators even need Developer communities. The track record is not good. Operators have a tendency to be too obsessive about service levels, have complex processes, are slow to respond, are arrogant, and are greedy.
Dimitris mentions a few operators at the vanguard, trying to work hard to address the opportunity, but of course all operators will make mistakes as they evolve. The key is making the mistake quickly, listening, learning, reiterating, and providing something better.
Of course this behaviour needs to be consistent, genuine, and sustained before we can expect any shift in the perception of operators in the market place, but this has to be the goal.
Scale is key to success in this market, as the global Developer community represents a classic long tail opportunity. Admob research shows iPhone users are downloading 9 – 10 new apps per month, and over half of iPhone users spend more than 30 minutes per day using apps. The goal for operators has to be to provide relevant, compelling, and accessible API’s to enrich the user experience of app’s and web services.
2. Finding a business model that works
Web Developers want everything free, so from the off there is a clash of mindset. Mobile operators are coming from a world of scarce premium priced resources, which customers are willing to pay for. Give things away for free? Are you mad?
Even when there is a justifiable charge for a service, the ability for the end user to pay varies dramatically region by region, affecting the ability to create clear, transparent global business models. For example a Big Mac in Germany costs 45% more than a Big Mac in Mexico.
Operators have to justify every investment with a payback model. Free to use API’s with an internal cost to develop and expose look incompatible when analysed with the same financial payback model for a traditional operator investment like an SMSC.
Therefore there needs to be evolution in the internal mindset of the operator to recognise there are multiple strategic benefits in adopting an API strategy to enable external 3rd party innovation, which in turn require new measures of success.
3. The really interesting stuff is hard, but that’s why it’s interesting!
In some ways creating compelling Network API’s represent a perfect storm.
Many operators have a desire to innovate and differentiate, Developers however want a standardised approach to network API’s to reduce the fragmentation and complexity of working with the operator world.
As I mentioned earlier, one of the keys to operators successfully positioning themselves in the ecosystem is for them to successfully understand, package, and retail their unique asset: the network.
Unlocking the value & insight that is available from the analysis’ of network transactional data, and the demographic information of the operator’s customer base represents a rich opportunity.
Of course this is not as simple as it sounds. It requires investment in CRM capability, and there are obvious sensitivities around the protection of customer data, and respecting the customers’ privacy. As I say, this stuff is hard, but that’s exactly why its interesting.
Key to success is putting control in the hands of the end user – opt in on a per Developer / application / or transaction basis allows the user to control how and when their data is accessed.
With O2 Litmus we have started to take network API’s in this direction. An example is our “Manage Post Pay Bolt On’s” API.
Free to use, this API has been introduced to help improve the customer experience of using Mobile Applications. Clearly we want the experience to be great for every customer. To avoid customers new to the world of mobile data and apps receiving bill shock for data usage, this API allows the Developer to check the customers account for the presence of “All you can eat” data plans or Wi-Fi.
The Developer simply queries the customers mobile number to be returned a status on if the account has all you can eat data or Wi-Fi access. The Developer can then use this information to create a better customer experience by warning customers that do not have those unlimited products provisioned, and advise how they can add them.
The end result is a clear demonstration of how a network API can add value to the user experience. The Developer is happy because they have proactively improved the customer feedback loop, minimising churn from their app. The customer is happy because there are no hidden surprises. The operator is happy because there is no bill shock scenario to deal with in customer services.
This also highlights that there is a second opportunity for network API’s to demonstrate value generation.
The first, covered by the Informa blog post discussed the ability for operators to generate direct revenue via charging Developers and service providers for access to, or transactions across, their API’s.
Operators, however, can also justify investment in API’s by understanding how exposing the right kind of API can introduce cost saving benefits e.g. reducing calls into customer care, and improving business processes to create happier customers. Simultaneously encouraging the adoption of new data services, and reducing churn.
I’ll regularly post further ideas and discussion points on how operators can continue to innovate to ensure they stay relevant and valuable in tomorrow’s digital ecosystem.
Please let me know what you think.
Orginally published at http://www.wipjam.com/ on 30th January 2009
We’ve asked our discussion leaders for WIPJam session to share their insight of the mobile developer world. This post was penned by James Parton, Head of O2 Litmus, the mobile developer programme with a twist and a sponsor of the WIP Jam Session at Mobile World Congress 2009 (#MWC09).
Open source, crowd sourcing, app stores, open networks, Web 2.0, Mobile 2.0, co-creation, user generated content. It’s clear that the future of application development is a hot industry topic.
Tip your hat to Apple. They have quickly transformed a cottage industry, struggling to find a poster child, into a serious business in a very short space of time. Through great end-to-end user experience – often overlooked by many in the area – we now have people buying apps on a regular basis. If you had asked those same people 6 months ago what kind of app they were interested in, they would have struggled to even define what an app was, let alone have a clear view on what was missing from their app life.
This wave has also beached in corporate boardrooms with many companies now launching or planning to launch app stores in reaction to the success of the Apple App Store. This leads us to ask where will the industry be in 6 months time?
Put yourself in the shoes of the customer for a second. They switch on their PCs and are be offered applications by their internet service provider. They then go to their favourite portal and may be offered applications, next they will see sponsored links for applications from their search engine.
Next they then pull their mobile phone out of their pocket and see an application store from their handset manufacturer, and sitting next that is the icon for their mobile network’s app store. Confused? Just imagine what the customer is thinking.
On the surface this explosion of app stores is a good thing for developers – more places to sell your apps means more people buying those apps, right?
However, this could be misleading. Many of these app stores are using aggregators to fill them up. This may lead to the vast majority of stores containing identical catalogues.
I can see parallels between the growing app market and digital music. Research has shown that over 90% of digital music catalogues are never downloaded. It’s an extreme example of Prato’s law. Are App stores already following the same path?
If these stores are filled by aggregators, and managed by marketers believing it’s all about catalogue, how do you as a developer get noticed? You want your app to be Smells Like Teen Spirit, and avoid being the obscure Cat Stevens B side from 1967 that no one wants!
So how do you solve this problem?
Customers. They are out there. They have an opinion. They are potential consumers of your products. You should get to know them, and love them. If you want to be successful, you have to prioritise customer relationship and service. Don’t just focus on the next feature you can build into your software.
Going back to my digital music analogy, we are going to see a huge attrition rate for apps. Thousands will never be downloaded or make profit. Can you afford to burn time and money speculating on what customers might want? Why not ask them before you commitment your engineering resource.
How do you find and reach these customers?
You should be seeking out partners that provide the most important API going forward. The winner of the most important API of 2009? It’s the Customer API.
Wouldn’t it be refreshing if a large organisation was willing to step out of the way and let you interact directly with its customers? You would be able to demonstrate, co-develop and refine your product directly with end users?
This has to be a win – win approach. You save time and effort by refining your ideas before commercially launching, the end user feels empowered by helping to improve the products they and their friends will end up using, plus they get to experience these apps before anyone else – very different to a traditional retail environment where you buy and either love or hate the app you get.
Come and check us out here and upload your apps: http://www.o2litmus.co.uk/ or you can contact me directly via Twitter: www.twitter.com/jamesparton
Have you registered for WIPJAM yet. Rumour has it there are 2 tickets to give-away to the O2-Telefoncia party on Tues nite…
