Today’s reading: VisionMobile on the “profit share trap”

Always worthwhile to read what the VisionMobile team is writing, and their latest blog post is no exception. This time they analyze the focus in the tech media on the “profit share” held by various players in the smartphone space, notably the huge percentage of total profit held by Apple, thanks to ongoing sales on iDevices.

Sameer Singh makes what should be an obvious point, that profit, and hence “profit share” depends as much on internal corporate issues as external consumer behavior. It indicates how well a particular company may be doing now, but not necessarily how successful they will be in the future.

For example, Apple dominates the smartphone profit rankings, due to the huge margins they earn on (mostly subsidized) iPhones and (mostly un-subsidized) iPads. Singh suggests that as smartphones become more mainstream, and hence less “cool”, those high prices and margins will be hard to sustain. The feature sets of different devices will converge, and price pressures will increasingly dominate consumer decisions.

On the other hand, I suspect that Apple has more flexibility in pricing because its products, iPads in particular, are more like “Veblen goods“, or luxury products that get more attractive at higher prices. Users of Apple mobile devices also consume more data and use more apps and web services than, for example, Android users, leading to further distortion of the app ecosystem, where enterprises favor iOS development even though Android has a higher market share.

We heard one example of this in a recent Mobile Monday DC panel on HTML5 vs Native Apps. Nancy Proctor, who heads mobile activities at the Smithsonian, reported that their development priorities are web first, then iOS, because they found that the people who use museum apps and web sites tend to be “culture consumers” who favor iOS devices.

I find this a bit worrisome, as it hints at a vicious cycle of app usage by “elite” (i.e. rich, educated) consumers, that then drives more development targeted at those elite users, and excluding the wider audience on other platforms who both use less data and have fewer options.


Mobile Monday DC August event: “Women and Philanthropy: Mobile For Good Works”

We’re excited about our next Mobile Monday DC event on August 13, when we are joining with the local Women In Wireless group to learn about “Women and Philanthropy: Mobile For Good Works“. We have invited an all-star panel of accomplished women to discuss the role of mobile technology and mobile solutions in supporting government services, diplomacy, development, public health, and other positive activity. The panel includes:

  • Ann Mei Chang (@annmei), Senior Advisor for Women and Technology, US Department of State (and a former Google executive)
  • Gwynne Kostin (@gwynnek), Director, Mobile, Office of Citizen Services & Innovative Technologies, in US General Services Administration (GSA)
  • Sandhya Rao (@sandhya_c_rao), Senior Advisor for Private Sector Partnerships, Bureau of Global Health, USAID
  • Candace Johnson, Founder and Co-Founder of SES, Loral Teleport Europe, Europe Online, VATM, GTWN, Success Europe

The panel will be moderated by Stephanie Joyce (@StephJoyceDC), a partner at Arent Fox, which is also hosting the event at their offices near Farragut North Metro, at 1050 Connecticut Avenue, NW.

The event starts at 6pm on Monday (of course!) the 13th with networking, followed by the panel at 7. There’s no charge for the event, thanks to the generosity of our sponsors, Arent Fox LLP and Jump Market Strategies.

Follow this link to register for the event. Hope to see you there!

Mobile Monday DC April event: Mobile Commerce

Please join Mobile Monday DC and our sponsor Davis Wright Tremaine LLP on April 23 for a discussion of the latest developments in mobile commerce:

Location: Davis Wright Tremaine LLP, 1919 Pennsylvania Ave NW #800, Washington, DC near the Farragut West Metro Station

6pm – 7pm – Networking Cocktail Hour
7pm – 8pm – Panel Discussion: Mobile Commerce
8pm – 9pm – Additional Discussion & Networking

Please RSVP via EventBrite

Andrew Lorentz, Partner @ Davis Wright Tremaine

Panel of Experts:
Paul Grill, Partner, First Annapolis Consulting
Paul Moreton, Senior Director – Mobile Payments, Capital One
Susan Pandy, Senior Director – Internet & Commerce, NACHA
Lisa Peterson, Director – Mobile Partnerships & Marketing, Neustar
Todd Strickler, Commerce Leader, Isis Mobile Commerce
Chris Wuhrer, Merchant Services, Bank of America

Mobile Monday DC March event: Mobile in Education

Please join Mobile Monday DC on March 19th for our next event, this time focusing on mobile solutions for education. We’re meeting at the Microsoft offices in Friendship Heights (right next to the Metro) for a discussion of how the mobile channel engages lifelong learners. Our panelists will share their experiences and their predictions on how tools and technologies will evolve.

As a plus, the team from Profiles will be on hand before the panel to talk with you about opportunities in the local mobile job market.

The event is free and open to the public. Please register and tell your friends (space is limited)!

Mobile Monday DC: post-game wrapup

We had another informative Mobile Monday DC meeting on Feb. 6, this time a session titled “Touchscreens and Touchdowns,” covering the intersection of sports and mobile technology and marketing. Thanks to our sponsors, IMRE Sports and the Georgetown U department of Sports Industry Management, we were able to use a beautiful room at Georgetown, and welcomed a good-sized crowd of GU students studying sports business.

For me, the key insight of the night was the panel’s take on the convergence of mobile, PC, and TV. I’ve always thought of convergence primarily as the availability of the same services on any screen: TV on your phone, email on your TV, etc. As panel moderator Marty Conway from IMRE described it, however, the real meaning of convergence in practice is people using multiple devices at the same time. He quoted data showing that 70% of Americans watch TV and browse the Internet at the same time (I’m certainly in that group). In the sports context, IMRE calls this converged consumer a “spectweeter,”  a fan watching the game while sharing the experience on her phone or tablet.

Joe Dupriest from the Washington Capitals described how the “spectweeter” is coming to live sports events as well, as major teams roll out WiFi networks in their arena and deliver new apps and services to fans’ mobile devices when they’re at the game.

From a mobile strategy and mobile marketing perspective, I think this presents yet another challenge to developers and marketeers when designing mobile apps and services. Not only do you need to design for limited screen space, but also for limited attention spans. That suggests a need for simpler, faster interfaces, even on devices like tablets where screen size is less of an issue.

For advertisers and those who want to monetize through advertising, “spectweeters” seem to be a very challenging customer base, who may not want to take the time to click through your ad or other attraction to see your message.

Following on what we learned this week, this is yet another thing for Mr. Zuckerberg and his pals to think about as they figure out Facebook’s mobile revenue strategy.

[Note: I’m working on a more in-depth analysis of the impact of screen size and attention time on mobile solution design. Watch this space for more info.]

photo by Monica’s Dad from flickr

Mobile Monday DC: Touchscreens and Touchdowns next week!

There’s still some space left for the next Mobile Monday DC event, “Touchscreens and Touchdowns,” focusing on mobile and the wide world of sports. We’re meeting at Georgetown University this time to hear from another excellent expert panel, including reps from ESPN and the Washington Capitals.

Hope to see you there!

Mobile Monday DC: Destination: Mobile

We had an excellent Mobile Monday DC meeting yesterday, all about mobile applications and services for the travel industry. Our panel included representatives from big players in the travel business (Marriott, Amtrak, Travel Channel) and from smaller startups in the field (PocketGuide, Taxi Magic, TravelZoo). It’s a natural subject for Mobile Monday; as Robert Spier from the Travel Channel noted, travelers are mobile by nature.

There was plenty to take in from the panel discussion, ably moderated by Stephanie Joyce from Arent Fox, who co-sponsored the event and provides the venue in their offices. Here are some highlights:

Travel is big business: President Obama mentioned in a speech on Jan. 19 that “Tourism is the number-one service that [the US exports]”. The panelists made it clear just how big a business it is. George Corbin described how Marriott discovered that its web site was the number 3 mobile commerce site, following Apple and Amazon. Another statistic from the evening: 1/3 of every dollar spent on the Internet goes to travel.

Mobile is a good investment: The panelists from Marriott and Amtrak both mentioned how mobile channels save costs, by reducing the number of calls to customer service. Amtrak is finding mobile to be the fastest growing channel, for information and ticket sales. TaxiMagic, by contrast, is a pure mobile service, which makes money directly from radically improving the ease of finding a cab in its target markets. (by the way, they’re hiring, as are the folks at Travel Channel/Scripps Media).

We’re just getting started: There are always new platforms to support and new markets to reach. Amtrak has a mobile app for only one platform (iOS) at present, and the Travel Channel is working on how to capture to experience of travel TV shows in mobile and digital form. The challenge for the smaller companies (Taxi Magic, PocketGuide) is expanding their reach to all of the markets they would like to serve. For companies with more established mobile solutions, like Marriott, there are always more ways to use mobile tech to improve the business. Marriott is exploring how to use mobile devices and services to improve the speed and efficiency of its “back of house” operations, such as housekeeping, to improve the customer experience while saving money.

Mobile is not easy (or cheap): The panelists, echoing what I’ve heard from many other companies dealing with developing mobile solutions, find that they never have enough money or people to do everything they want to do. It’s also hard to know what to do first, as customers don’t necessarily know what they “want” from new technologies and new delivery and business models. There’s an old joke in the advertising business that 50% of ad spending is wasted, but you don’t know which 50%. George Corbin from Marriott took that further. In mobile, he said, you can do 500 things, but only 10 matter. That requires (my favorite quote of the night) “ruthless prioritization“, and a clear focus on what the customer is trying to do with the apps and services.

Were you at the event? Please chime in with your thoughts and conclusions. I’ll try to add links to other reviews as I find them.

Our next Mobile Monday event is on February 6, this time covering mobile solutions for sports. Please sign up for Touchscreens & Touchdowns, and hope to see you there!