Over one billion new mobile devices are sold each year. Each mobile device model has unique characteristics and performs differently on different mobile networks.
Handset fragmentation makes it difficult to provide a mobile service for the mass market. The proliferation of mobile operating systems and environments – Symbian, BREW, Java ME,Windows Mobile, Mobile Linux, BlackBerry OS, iPhone and, most recently, Android — creates additional complexity. It makes mass deployment of a wireless service extremely problematic.
In view of this dilemma, vendors of proprietary mobile email software have purposely restricted offerings to a limited set of devices. A prime example is Research In Motion (RIM). Its proprietary push email solution runs only on a handful of BlackBerry devices. This may work when the addressable market is made up of a relatively homogenous group of enterprise users that primarily require access to one system (Exchange). But when the target audience is a large varied mix of consumers and prosumers, then an all-inclusive approach – one designed from the ground up to work on a multitude of devices – makes better sense.
Leveraging a solution that runs on as many phones as possible is an recipe for success that enables mobile operators and service providers to address their largest possible market.
2.2 It pays to be open… source
For this reason, an open source approach is ideal to address the market for mobile email. In contrast to proprietary software, open source is furthered by the parties that contribute to its development. What’s more, all parties are encouraged to change and improve it.
As a result, the quality, ease-of-use and performance of open source software now rival that of proprietary software. A prime example is Linux, software that benefits from a large and loyal developer community. Against this backdrop, mobile operators and service providers are increasingly using open source software, from operating systems to infrastructure and, most recently, extending that up the software stack to mobile apps and services. It reduces their internal complexity and
cost and levels the playing field.
When it comes to mobile, the primary value that open source provides is broad device compatibility. Take the case of Funambol, which is the largest mobile open source project in the world. Its software has been downloaded more than two million times by a community of 50,000 developers around the world. Their community tests and improves the software
running on a wide range of devices and mobile networks. Because developers can access the code, they can quickly pinpoint and resolve issues. This world’s ‘largest virtual mobile development and quality assurance team’ enables Funambol to support 1.5 billion mobile handsets, including the latest mobile devices much more quickly than proprietary approaches.
It is the only proven and practical way to address device fragmentation. Another value of open source to mobile is that it provides the maximum control for deployments. This is crucial because mobile is inherently complex and there is no substitute
to having source code as the ultimate flexible safety valve. Open source also provides superior value because its economics are significantly different than that of proprietary software. This is why industry analysts and users view open source as a disruptive force in the industry. It involves significantly lower development, QA, sales and marketing costs, which translates into cost savings which ripple throughout the value chain.
In summary: Using open source allows mobile operators and service providers to successfully deploy compelling new services such as mobile email to the mass market.
3. An offer they can’t refuse – free
While open source makes it possible to deliver mobile email to a mass market, the new key to success is to make it free.
A recent industry survey of mobile phone users in the U.K., Germany, Italy, Spain, and the U.S. conducted by Vanson Bourne, a specialist research-based technology marketing consultancy, reveals that 79 percent of respondents would accept ads attached to email messages if the mobile email service was free. The survey also found that a whopping 98 percent of respondents cited cost as a reason for not trying or using new mobile data services in the past.
3.1 Ad-funded drives results
How does an ad-funded mobile email model work? And would it benefit the business ecosystem of service providers and advertisers? Do the math, and the following example proves ad-funded services drive positive results up and down the value chain.
Consider the following scenario: Advertisers are willing to pay 20 euros per CPM (1,000 ad impressions). A typical email user receives 10 emails per day, which exposes them to 300 ads per month, which is .3 of a CPM per month. This user generates 6 euros of value per month. This must cover the cost of providing mobile email to the user, including the data traffic for the service, with the balance shared by those in the value chain. This can enable a service provider to net one to two euros per user per month. When multiplied by hundreds of thousands or millions of users who are attracted to free email, this represents a lucrative new revenue stream.
Service providers clearly benefit from offering an ad-supported service; but they can achieve a sustainable competitive advantage only if they are also first-to-market. Indeed, a review of free and paid mobile services shows first-mover advantage can literally pay dividends. Specifically, a free service that is also the first to market can chalk up an adoption rate of
between 10 and 20 times that of a comparable paid service. In the case of mobile email, a service offered as part of a paid subscription model might typically achieve a modest 1 to 3 percent uptake. In contrast, a first-to-market ad-funded
mobile email service might be adopted by a mass user base of 10 to 20 times that amount. In a nutshell, the first to market can cash in on mass market demand for ad-supported services. A first-mover advantage is enjoyed by the service provider that understands this trend and – more importantly – acts on it.
Connect the dots and there is intriguing evidence that an ad-funded or ad-subsidized go-tomarket model is the only approach that will drive service adoption among cost-conscious mass market users. Put simply, an ad-funded business model is the only approach that gives people the service they want at minimal or no cost, while allowing mobile operators and service providers to generate significant revenue.
3.2 Relevancy rules!
The success of an ad-funded mobile email solution is dependent upon the propensity of users to accept and act upon the mobile ads they are shown. Studies show that users are more likely to pay attention when the brand messages are genuinely useful and relevant. Put simply, consumers welcome advertising that is in tune with their own lifestyles and life stages.
Indeed, a series of recent reports indicate ad-funded content and services models are set to gain serious traction if the advertising presented to consumers can be tailored more to their needs. A survey of consumers conducted by global market research firm Ipsos Mori, for example, found that over a third of 16 to 34 year-olds who own a mobile phone are happy to
receive mobile advertising in return for free content such as music, games or video. However, the study cautions that effective advertising must be “creative, relevant, and non-intrusive.”
Anything else is spam.
What is a useful service? Interestingly, there is mounting evidence that consumers place location-aware advertising, such as coupons from local stores or special offers from shops nearby, at the top of the list. To be sure, relevancy – and hence useful advertising – must leverage the clues an individual leaves behind – including demographic data, preferences, past purchasing history, browsing patterns and location. However, it is paramount that such systems respect individual privacy.
One way to ensure that advertising is not perceived as intrusive is to offer users the option to opt-out in return for a small monthly fee. That way, the consumer is empowered to accept advertising on their terms only.
3.3 The Right Stuff
Spoiled by the Internet, where the price of bandwidth and storage have dropped dramatically, mass market users expect the majority of Web content and communications services to be free. Indeed, the Web has become the land of the free and the impact of the companies whose businesses touch the Web has been profound. “There has never been a more competitive market than the Internet,” Chris Anderson, editor in chief of Wired magazine and author of the milestone book The Long Tail, writes in his new book FREE. “And every day the marginal cost of digital information comes closer to nothing.”
Put simply, free has emerged as a full-fledged economy. Artists such as Radiohead and Nine Inch Nails offer music for free – and make a profit in the process; the fastest growing segments of the gaming industry are free-to-try massively multiplayer games; and Google and Yahoo! cleverly offer every service free to consumers.
adapted from Free For All:The Untapped Opportunity for Mass Market Mobile by mSeach Groove