Who owns the mCommerce platform, operators or handset makers? Let the battle commence.

With all the talk of mCommerce and contactless (NFC in particular), a war between the operators and handset manufacturers was always on the cards. It looks like it’s beginning to kick off. The Wall Street Journal reported on Friday that RIM (BlackBerry) was ‘locking horns’ with operators over who controlled the NFC customer data. The issue is about where ‘credentials’ (the encrypted personal payment information) will be stored. Will it be on the SIM card (operator) or the phone memory (handset manufacturer). This is much more than a row over a technical function, as the customer will be tied either to their network or handset depending on how this data is stored. Whilst RIM talked about their close relationship with operators at the Mobile World Congress, one senior figure at Bell Canada recently stated “we expect some closed operating-system vendors will probably try to build into the handset. RIM and Apple fall into that category”.

The problem from an operator perspective is that whilst revenues are being squeezed, customers are demanding much more for their money, in particular they want more data. How do the operators make more money in already saturated markets? The answer is through providing mCommerce. In order to do that they will need to invest in expensive security infrastructures, making it even more critical to keep their customers with SIM-based credentials. On the other hand, we have increasingly seen handset manufacturers and handset operating systems define the mobile market and mobile content. The two that have done most to drivfe this change are Apple’s iPhone (and appstore) and Google’s Android.

My money is on the handset/operating systems winning out. Apart from their obvious success in defining the mobile content channel, they seem to have the revenue model right. Operators tend to charge consumers or merchants/content producers high transaction charges – look at app stores before Apple (£1000 + to get your game listed) and the low payouts on premium SMS. On the other hand, Apple and Google are past masters at the freemium model – get something for free and pay if you like it. And there’s no question about which model consumers prefer.


Dean Bubley’s blog gives more insight into the NFC revenue model

French Connection iPhone app

As the mobile retail bandwagon rolls on, it is interesting to see that French Connection have launched a fully transactional iPhone app (meaning an app where you can buy stuff). That’s an iPhone app, not an Android, Symbian or anything else app. Whilst the rest of retail have identified the mobile web as the best delivery mechanism to reach all their customers, it seems that they were all wrong. French Connection have identified their customers as iPhone users. One of the key features of the app is that it is cloud-based, which means that updates can be easily delivered without the need to update the app itself. The app was created by mobile technology firm Answer. Besides the ability to easily manage updates, the cloud approach means that the app can be easily rolled out for other mobile platforms such as BlackBerry or Android. So, it’s interesting to see that they haven’t actually bothered to do that.

Clearly French Connection’s has found that their demographic is largely on the iPhone and not other mobile platforms. Otherwise they would have made it available for other operating systems. An interesting conclusion from a middle market fashion chain. Or is this a case of the technology tail wagging the marketing dog?

Mobile Location Advertising 20 Times More Effective than Online Banners

Although this figure comes from the CEO of HopStop, a digial advertising specialist, it seems to ring true. “We’re seeing click-through rates on the mobile Web and on our apps that exceed our online ads by 20 times,” said Joe Meyer CEO of HopStop speaking at an online advertising conference in the US. Many of the examples come from the likes of McDonalds and Starbucks. Inevitably multi-location outlets like these are the most likely to attract impulse offers, so it is impossible to say if the 20 times figure applies to other sectors.

Also at the conference were research company InsightExpress who revealed some interesting figures about where people use their phones: 82 percent said in a store, 55 percent said in a doctor’s office or hospital, 36 percent said at a sporting event, 17 percent said during a movie at the theater (the film must have been very dull), 14 percent said while flying on a plane and 7 percent during church service (yes, really). The research also showed that it’s good news for mobile retail, with 56% of people visiting a retailers mobile web site. Consistant with previous studies, such as the IAB, they found that 48% of people would prefer to use the mobile web whereas 36% have a preference for apps (the remainder didn’t mind).

The conclusion was that mobile advertising can be 2-3 times more effective than online, in both awareness and click through rates. A spokesperson for the company said: ‘High mobile ad awareness has a lot to do with rich-media ad units and social media integration. Two words, relevancy and respect, and that is what it comes down to—keep those two buzz words top of mind.” Well said.

Absolute Radio Mobile App Usage

It’s great when brands release real data about the success of their mobile strategy (and generally they only release it when they are successful). Absolute Radio released some figures about their mobile audience this week, which makes for some interesting reading. The radio station has focussed it’s mobile offering in a series of apps for listening to their various channels. They have no mobile site, and do very little by way of SMS-based engagement. Their eggs are very much in the app basket.

They tell us they had 222,000 ‘active’ app users in January and each user accessed it an average of 7.5 times. These are very good results. Most free apps, especially branded free apps are used just once or never at all. How does it compare to their broadcast listening figures? In December the station was listed to by 1.375 million people each week with an average of 6.9 hours per person. That makes their mobile audience to be a whopping 16% of their total share. Pretty good going. However, this comparison is not really like for like. App access rates (especially if there are push alerts etc) are not really a sign of user engagement. How long were they listening to the station for? Were they listening to the station or doing something else in the app? Lets hope that one day we can see some real data that compares the broadcast and mobile channel.

Who Scans QR Codes?

I’m frequently asked when QR codes will take off. They are already common place in Japan and we have seen a number of attempts to implement them elsewhere in Europe and the US. Whilst they are being used across a number of channels there is little evidence that they are broadly adopted by consumers.

An infographic from a QR company therefore shows some surprising results: 28% of people (in the US I presume) have scanned a QR code. Really? It also tells us that 57% of Twitter and Facebook users have scanned a code in the last year. However that suprisingly large figure doesn’t tell us if they will continue to use them. I wonder how many people have scanned one once out of curiosity but don’t intend to do it again? Although the stats in the graphic show an encouraging performance for QR, somehow it doesn’t match the reality. I have previously blogged about the effort vs reward issue. QR will only become big if the reward of scanning a code is significantly greater than the effort of doing so. I have yet to see a campaign outside of Japan that offers such a reward.

More on the stats here

Google translate for animals. Apparently this isn’t a joke.

This photo clearly uses a fake goat. If it was a real one it would have eaten the phone.

I had to check the calander when I saw this. For a minute I thought March had passed me by and it was April 1st. However, it’s true. Google have released an Android app which can translate animal noises into English. No really. It’s here: http://www.google.co.uk/intl/en/landing/translateforanimals/. The choice of ‘languages’ include cat, dog, bird, rabbit, guinea pig, hamster, horse, chicken, sheep, donkey, pig and er tortoise. What kind of noise does a tortoise make? None at all as far as I can remember.

Although the app is serious, showing Google’s ability to use algorithms to do just about anything, the search company is tongue in check about the results. Their site states that ‘it is not Google’s responsibility if you are offended or disappointed by what your chosen animal may say. Also please note, we do not guarantee stimulating conversation’. As well as giving the animals words as text it can also speak the translation. Google haven’t said if it works in reverse. Will users be able to talk into their phone and it will then speak it in ‘Dog’?

BlackBerry will include NFC

The latest proof that NFC (Near Field Communications) or contactless payments will be big in mobile comes from BlackBerry. First, leaks from Google showed how they had big plans for contactless payments and advertising. Then there was the evidence pointing to Apple’s inclusion of NFC in the iPhone 5. Now, RIM, the Canadian company who manufacture the BlackBerry have once again confirmed their commitment to contactless. UK MD Stephen Bates, said that NFC would be in “all of our new devices moving forward”. Pretty conclusive.

With a commitment from the handset manufacturers, card payment companies and mobile operators it looks like there’s little to stop NFC. Well, little apart from consumer adoption.