Mobile and Cloud Computing – Is the Powerful Combination and the Next Killer App?

Can you predict the future of computing and mobile from observing the behavior of kids? One of the things I have always noted about my own kids, my nieces and my nephews is the overwhelming attachment to hand-held toys – no, I am not talking about cell phones and portable game players. While those doll houses, sit-and-spins, backyard playhouse, push cars, Lego sets, and other big toys are fun, they don’t seem to hold the attention of a child for very long. What kids prefer are smaller toys that are hand-held, can be taken around with in their book bags, and can be used just about anywhere. Let’s face it, kids don’t want to be in their bedrooms playing with some big toy, they want to bring that toy to where everyone is gathering in the house and play where there are more people around. And when it’s time to go, they want to take the toy with them and continue playing with it.

Will the Home Desktop RIP?

I see the same thing happening with consumer electronics. People love their mobile phones and laptops, precisely because they are mobile – they are much like those small toys that kids play with more than those really big things. I can see desktop computer systems, which are tethered in our home offices, becoming a thing of the past. As laptops and e-book flow into the school system, our kids will become used to their school work, entertainment, and connectivity carried around in one device and accessible from anywhere.

What Became of the 1930’s Family Radio?

Likewise, it’s not uncommon in a household for everyone to be off doing something different – maybe I’m on my laptop, my daughter might be reading a book, and so on. Why do I need a TV set for the family to gather around? Will it have the same fate as the family radio that everyone gathered around to listen to in the 1930’s? My daughters both know how to watch Internet TV shows and movies on their computers. And yes, both my daughters had laptops or net books by kindergarten. As long as they are each getting to watch the TV show of their choice, I don’t have to listen to them argue over whose turn it is to watch their show on the big screen.

The typical laptop sells for $645, the netbook around $500, and a big screen 50 inch TV monitor is $1,500. Do I really need that TV? Nope, I really don’t. That’s one TV for my kids to fight over or three laptops that will create peace and quiet in the house – and laptops do double duty for school work!

Will Mobile Unseat Some Laptop Uses?

For some applications, it’s just simpler to access them on a mobile device. I have no need to look up movie show times on my laptop when I can just touch an icon on my iPhone.

Are Small Businesses Migrating to Mobile?

According to a Scarborough Research study, for the average person, the major uses for a mobile device are text messaging, email, Internet searches, and picture or video capture. The home computer use is for Internet access and email. What I’ve noticed recently is that people aren’t even using computers as much anymore. I see small businesses that have been established for some time and have investments in desktop computers continue to use them. But those new businesses run by those 20- or 30-somethings are moving exclusively onto their cell phones to conduct business. My kids, who are your typical overscheduled children, have many afterschool activities and the providers of these activities along with most small businesses I patronize, just use their cell phones to correspond with customers – everything seems to be tagged with “from my iPhone” or “from my Blackberry”. Appointments can be made and confirmed with online calendars, bills sent to my email accounts and payments can be made electronically.

Is Cloud Computing Moving Us Back To The Past?

Now consider that cloud computing is moving the compute power of the commonplace software application away from the desktop into the cloud. Why do we need to have QuickBooks loaded on our home PCs when our files can be held in a system elsewhere. I really dislike when my home PC crashes and I have to reload all the software and restore the back-up. I am very willing to let that be someone else’s job! Apps were on the desktop because of inadequate connectivity, but the Internet has improved dramatically since the days when this direction was taken. At large sporting events, crowds of fans still cannot all tweet themselves silly because there are network capacity limitations. Greater mobile connectivity is coming.
Once there were mainframes and users accessed the compute power from dumb terminals. Are we moving back to the past, but with a new and improved twist? Will laptops and cell phones simply become the dumb terminal interface to the applications elsewhere?

Okay, you have me. The cell phone screen size is still annoying to me, but I think a lot of that can be solved with designing apps to be displayed on the smaller screens instead of converting user interfaces meant to be displayed on larger screen devices.

Cell Phones and Internet Access Are a Necessity

Nokia reportedly sells 260,000 smartphones worldwide each day, Android sells 200,000, and iPhone sells 80,000 phones. Super smartphones are in the works with on-board memory and multi-core processors.

As city-wide Wi-Fi networks are established and our cars become Wi-Fi hotspots and the vehicular and ad-hoc networks technology improves, everyone will have greater access to the Internet from anywhere and further push the functionality of mobile and wireless.

Ever country on the globe has developed their own national broadband plan, and every one I’ve read, has Internet access for the entire populations and education moving to digital as top priorities. Cell phones and the Internet have become a necessity, much like any other utility such as electricity, water, and gas.

In China, the youth aspire to have the latest and greatest cell phone, not to the next generation laptop. They cannot afford both. The same will be true of India – a large population with cell phones, but not necessarily laptops or netbooks.

The Connection to Start-ups

What does all of this have to do with start-ups? There is a big opportunity to make smartphones and cloud computing the platform for small businesses. Cell phones and mobile have made great strides in the consumer market, but there has not been much traction in developing this technology to operate small businesses. Young entrepreneurs, who are digital savvy and already accustomed to smart phones, will prefer this device to conduct electronically. And in regions of the world, where ownership of both cell phones and laptops are not economically feasible, it makes sense to move simple small business apps to the available devices.

Should You Use Mobile Spread Betting?

Smart phones like the iPhone, Blackberry and Android have helped revolutionise mobile spread betting. Previously everyone was concerned with security, execution times and ease of use but it seems those concerns have been addressed as City Index announced in April 2011 that the number of trades made on their award winning City Trading Application on the iPhone has gone from making only 3% trades in 2009 to over 15% in 2011.

It seems that traders behaviour has altered from using the traditional web trading platform to using mobile technologies help traders check positions, charts and prices on the move.

If execution time is a true concern to you then you shouldn’t be attempting to use a mobile as 3G networks are often unreliable but if you’re waiting to pay your lunch bill and you’re losing hundreds every minutes your waiting for server to bring you your bill then having a mobile app might come in useful.

Mobile trading platform not only allow you to open and close positions in the normal fashion of stop and limit orders, but now some like GFT and IG Index allow you to create advanced charts, have real time news from Reuters and Bloomberg helping you keep up-to-date with the markets.

What Platform are Available

City Index allow you to now trade with CFD’s and Spread Betting with their City Trading App.

IG Index offer all the same markets as we offer on their main platform.

GFT have on offer over 13 of the world most popular technical indicators and 3 charts types, candlestick, line or bar charts.

CMC Markets only have an iPhone app, but unlike other apps MarketMaker allows you to make top up payments at a touch of button.

SpreadEx is one on the most recent app to the market but not allow bets to be placed on the markets but also on sports books.

Summary

The Mobile Goldmine?

The predictions are that mobile content – pictures, audio, video and games – will be a massive market within the next few years. What are the opportunities and threats for developers of that content? Mark Brill from Ping Corporation Ltd looks at the issues for mobile content, and what the future may hold.

The Opportunities

All of the research shows that mobile content is going to be massive in the next five years. Screen digest estimated the value of this content to be £5.46bn a year by 2011. A 2006 Gartner Survey estimated that mobile content would be worth a less conservative $78 billion within the next 5 years.

We have already seen a ‘first wave’ of mobile content, largely dominated by ringtones and backgrounds. However the predicted ‘second wave’ of mobile content is almost upon us and it is expected to generate greater revenues, with a longer lifespan than the first wave.

What will bring about this second wave?

The growth in mobile content will be driven by improvements in technology such as higher resolution screens, better software and improved data connections, such as 3G. Handset technology is converging with internet technologies through the introduction of devices such as the I-phone and the impending Google Phone. The line between phone, music or video player and PDA is becoming seamless.

At the same time the mobile phone operators are reviewing their pricing policies for data. Until recently, the cost of downloading was a few pounds per megabyte. This was a major barrier to downloading content. Most of the operators in the UK are now offering a flat rate for data, following a similar model to home broadband.

Premium SMS offers a simple revenue model allowing micro payments to be taken quickly. Identifying a phone number through SMS also allows for easy user and age verification with content restriction to unregistered phones. The growth of 3rd party developers will continue. Many industry observers regard D2C (direct to consumer) as the most likely area to succeed with the most engaging content and the best user experience.

With over 3 billion phones worldwide, mobile technology is in wider use than PC-based internet access or television. As such it has the potential to become an enormously powerful tool for selling and distributing content. A goldmine for mobile content providers.

Selling onto mobile

Typically the route to market is as follows:

* Content is created – pictures, video or audio

* The content provider sells through a distributor – such as Player-X or direct to the consumer via a platform such as immedia24.

Distributors will generally work with operator portals, such as Vodafone Live or T-Mobile’s T-Zones. This is always operated on a revenue share – the content is not bought outright, but the revenue from Premium SMS is shared between the portal, distributor and content developer.

A D2C platform, such as immedia24 offers considerably more control over the content and a larger revenue share. Potentially it has a higher audience than the operator portal simply because many operators insist on exclusivity for content. The disadvantage is that there is no existing mobile customer base. D2C works well where there is already an audience through the web or other media, or where there is an advertising budget to see the content.

The Threats

In spite of some great opportunities, there are still many problems with creating and delivering mobile content.

Mobile Internet is accessed by only 23% of mobile users in the UK. Although at over 15m people that is still a considerable market, it is not as ubiquitous as SMS.

Whilst there are many people who can create great mobile content, the route to delivery is problematic. The mobile operators have generally regarded themselves as the key providers of mobile content, assuming that most people will want to download through their portals. However, it has been shown that the mobile users do not regard their operator as a trustworthy content provider. Operator Interference The operators have tried to restrict 3rd party content in many ways. Unlike an internet service provider, the mobile operators’ online connections are made via their portals. Not only do they restrict which sites can be accessed, but they often alter the content itself. Ostensibly this has been under the guise of formatting the content for mobile, however there are examples of operators altering the display of 3rd party sites to remove much of the functionality and ruin the user experience.

Poor User Experience

The problems with poor user experience also relates to both the handsets themselves and the route to delivery. Whilst screen resolution, memory and functionality have improved on many handsets, usability can still be poor. The I-phone for example has been plagued with problems – everything from the battery life to high data charges. In the UK the I-phone will be locked to the O2 network. So if you want to change networks you will simply be left with a £400 brick!

At the point of download user experience has been equally poor. For example 3g in the UK is not as fast as broadband and is not always available. Poor pricing policies have compounded these problems. High profile Premium Rate rip-offs combined with confusing charges has resulted in many mobile users steering well clear of anything that may involve a premium rate SMS for downloading. Although flat rate data pricing is common place in the UK, the charges for accessing data abroad are still over £7 per megabyte.

Compatibility

A variety of operating systems, screen sizes and screen ratios make delivery of pictures, video and audio somewhat problematic. This is largely a technical issue for developers rather than the content creator. However the fact that there are few standards in mobile operating systems means that in the end the user will suffer. One poor experience with mobile content can put a user off for a very long time.

Low Premium Rate SMS Payouts

Whilst Premium SMS (PSMS) offers some great opportunities for both micro billing and non-credit card billing systems, the payouts offered by the networks are very low. For a £1.50 PSMS that the user pays (£1.26 after VAT), the operator and aggregator will take over 30p. This figure can be much higher on some networks. This leaves little over 90p for the content provider, creator or developer.

It means that the content provider can be forced into a position of charging considerably more for mobile content than when it is delivered though credit card billing on a web-site.

The Possibilities

With all these draw backs you may be thinking that there is little point in pursuing the Mobile Goldmine. However the potential of the mobile content market clearly exists. The issue, as with any new information technology, is to ensure that the needs of the user are understood and clearly met.

The convergence argument suggests that as we adopt more I-phone style handsets the line between mobile and web will disappear. Simply put, there is no need for developers to worry about mobile content specifically as we will all have the web on our phones.

Looking at the threats outlined above, it is clear that a division will remain between the internet and mobile. Inevitably small screen sizes and keypads will always create a different experience for the user. If I look at my own usage of mobile internet, I will acknowledge an email, but not write a lengthy reply. Whilst I may search for a film showing time or check an address on my web connected phone, I would not use it to book a flight or make a bank transfer. That is, as much as anything else a practical consideration of what it is possible to do with a small keyboard or screen.

Understanding the Technology

The key to accessing the Mobile Goldmine is to understand the relationship between a user and the technology. For example, we relate to our TV quite differently to our PC and the web, even though these days the technologies are similar.

What is the relationship between a user and their phone?

* Primarily it is for SMS (over 4 billion are sent each month in the UK) and phone calls

* It is a means of storing phone numbers – over 60% of people use their mobile as their main, often their only address book

* It is a means of killing time – playing games or sending messages while waiting for a bus, train or friend

* The phone is linked to personal identity

This last point is significant. For many people, the phone that they own, the ringtone or the background are all statements about how they see themselves. It is a highly personal item that is with them almost of the time. We have seen this in our studies with teenage mobile users, where their phone is now more significant to their peers than the clothes or the trainers they wear. Two years ago the Motorola Razor was the best selling phone, even though it performed the worst in usability tests. It was sleek, flat and came in bright pink. These factors were more important than the practical considerations.

Thus the key to successful mobile content is to develop specific content that meets the needs of the user. The first key to success is good usability. It is estimated that for each additional click required to access content, the provider will loose 30% of it’s potential audience.

It should then engage the user in a way that supports their identity. In some areas, such as music or sport it is quite straight forward to engage at this level. In sectors such as the film or television, it may prove to be harder requiring more creative skills and ideas. It is also important to view mobile content not as an end in itself, but as a tool to enhance the user’s experience across many platforms, such as the web, television or cinema. There are numerous examples where the web has successfully been used to enhance and support more traditional media and mobile may be used in the same way.

Ultimately the best approach to developing mobile content is not to be driven by the capabilities of the technology, but rather to understand the user’s relationship with their phone and produce clever and engaging content.

© Mark Brill, Ping Corporation Ltd, 2007.

This article was written to accompany the Own-IT seminar, The Mobile Goldmine?, in October 2007.

Ping Corporation is an independent company providing solutions for mobile messaging and content delivery. Mark has worked in the sector for five years, having previously developed web applications since 1994.