(reprinted by permission from Amy Wohl’s Opinions, June 20, 2002. See the original article at http://www.wohl.com/wa0231.htm.)

Is There A Killer App For Mobile?

While telcos, hardware server and device vendors, and software vendors have all had great hopes for mobile as the next great area of information growth. So far, results have been, let us admit, less than exciting.

We believe we understand some of the reasons, although we’re not sure the communities vested in the success of mobile would agree.

In The Consumer Market

Many thought the U.S. market would follow the remarkable growth and usage patterns of the Japanese acceptance of mobile services, especially in the consumer market. In doing so they forgot to note important differences between the U.S. and Japanese markets.

1. The U.S. market is heavily penetrated with PC technology, with about 60% of U.S. households having at least one PC.

2. Japan has much lower penetration rates perhaps because of less physical real estate in tiny homes for PC’s.

3. To the Japanese, mobile devices may be their ONLY form of Internet access, Instant Messaging, etc.

4. To U.S. consumers, the desire to access the Internet on the tiny screen of a mobile device, when the Internet is already accessible, much more luxuriously, on a PC in the home, is much less compelling.

5. Because so many services have historically been provided in the U.S. on the Internet for free, bundled into ISP fees, or otherwise invisibly financed for the consumer (as part of a membership or the purchase of a product, for example), U.S. consumer are also unlikely in the extreme to be willing to pay for many of the profitable services which make up a large part of the Japanese DoCoMo model. This has been proven time after time as various services have tried to move to paid models on the web and failed.

In The Business Market

The business market has been another matter. We have seen slow but steady growth of the use of mobile devices. This growth has been slowed by a variety of problems, but none of them are absolute barriers.

1. A lack of infrastructure standards means that no technology is fully built-out and signal strength and availability varies depending on location.

The failure of some businesses and the convergence of others will result in a smaller number of players and eventually better coverage models.

2. There is no single standard for device design, operating systems, or software, so each project is burdened with the knowledge that in choosing SOMETHING it is necessarily making itself potentially incompatible with what may become the future standard. Many projects have been delayed – or at least held at a limited pilot stage – barring a better understanding of where these standards will go.

It is unlikely that we will ever have a single standard in any area, but strong mainstream trends – and de factor or institutional standards – are likely to emerge to guide nervous business buyers.

3. No mobile device has yet solved the problem of how to offer a large enough screen for a good Internet viewing experience and a user interface (such as a keyboard) for user input, within the footprint of a small, lightweight device. Any scheme which promotes adding reasonable accessories as options makes the device behave differently (and sub-optimally)in mobile mode.


We believe progress will be made here, but that out-of-the-box thinking is required to get to new designs. Human eyes and human fingers will not get smaller – the design must accommodate that fact.

4. Economic hard times have kept many companies from investing in the IT projects which would have made major investments in mobile technology. There are good reasons why businesses can justify mobility for specific applications, but in a climate where fewer new applications are being approved, not much is happening.

We believe this is a timing issue and will improve as the economic cycle moves into its up swing in late 2002 and on into 2003. Mobility is a natural part of implementing many SCM and CRM applications which include work flows and mobile workers so as these applications are designed and implemented, the use of mobile devices will naturally increase.

In the meantime, we’ve been looking at the issue of whether there is a “killer app” for mobile that could, at the right moment, propel the market to its next stage. To assist us in our thinking, we’ve talked to several players, but especially to market veteran Said Mohammadioun, CEO of Synchrologic (and a former Lotus Vice President, and founder of Samna, one of the early successful PC word processing software companies). Don’t blame him if you don’t like what you see here – the results are my best guesses (and responsibility) alone.

Think of the potential market as consisting of a series of potential user segments. Each segment has a set of potential mobile applications and there are some players (existing or potential) to service that market. The game is to see:

1. Are there enough viable players for a market segment to get underway?

2. Are the users in the identified segment ready to buy something?

3. Who will pay for it? (It having many meanings – devices, software, monthly fees, and optional services.)

4. How will the enabler(s) make money?

With Said’s help, we’ve constructed a view of what we think could be an important enabler (we’re wary of using the “killer app” label) to get the mobile market to the mainstream. That application is “synching” or coordinating the information you store on various systems. (That, of course, is what Synchrologic does and why Said was a logical person to talk to.)

In some Internet future, Web Services may make this obvious or invisible, but today the information you hold in your hand is not necessarily the information on your office desktop or in your home office or on your corporate server.

When you use a device as a web browser to a web server-based application, this is irrelevant. Your authenticated and authorized identification provides you with access to centrally stored information. You can be anywhere, using pretty much any device – the information is waiting for your command. If all the information can only live in ONE place and there’s only a single copy, by definition it’s “synched.”

But human beings like to USE their information and that inevitably means changing it. We add and delete names and addresses, write new emails, edit documents, and so forth. And we’re not necessarily willing to only do this when we’re tethered to a web server. Considerations of connection availability and cost get in the way. This means that the files and documents stored elsewhere are no longer the same as the ones in our hand. At the same time, our desktop or central devices are accepting new information we don’t know about – and we need to find it if we are to continue effectively working.

Consumers

We know there is a U.S. consumer mobile market; it’s mainly for mobile phones. The question is can we stretch it into something else, more like the Japanese DoCoMo messaging-and-services model or the European messaging model.

We’ve commented already on how different the U.S. market is with respect to PC penetration and how that has biased consumer perspectives on what the Internet browsing experience should look and feel like and, perhaps more to the point, what it should cost.

The natural service providers to consumers are the telcos. They know where the consumers are and they have the infrastructure in place to bill them for services. Providing email, personal information management, and the ability to store and update this information should be within their capabilities. Although very few of them have successfully become ISP’s, all of them are offering some form of Internet services. We’d expect them to grow into this space, providing email, information storage, and synchronizing, for small fees, in large volumes. They’re in it for the connect charges.

Business

The business side is both more interesting and perhaps more immediate. Businesses have lots of applications for where mobility is useful, even required. In some cases, companies have raced ahead of standards, even of mainstream devices, and simply built their own systems. The tablets the UPS man uses to enter tracking data and send it back into the UPS system is a good example.

Of course it will be easier, faster, and cheaper to build systems based on in-place infrastructure, devices built to a mainstream market volume, and standards, but in unavoidable chicken-and-egg fashion, it’s hard to make those things appear without the market size to call them forth.

Small and medium businesses will most likely need to use ASP’s to create and provide application environments where they can host applications and coordinate the delivery and updating of business processes and information. In some very specific markets and applications, mobile access and updating is becoming available via these partnerships.

Enterprises could make use of ASP’s or other Service Providers (SP’s) such as Information Utilities (a la IBM’s new e-Business on Demand). A handful of vendors already provide services to business including message hosting and delivery (RIM, Accenture, telcos).

It is likely that many Enterprises will simply choose to host their own applications and provide their own synchronizing services for their mobile employees, contractors, suppliers (or even customers). This provides them with more control (which many demand) and the ability to customize how their services are provided. Synchrologic, Sybase (iAnywhere), Extended Systems, and Aether are examples of companies who provide such software.

In many cases, we’d expect the partnership to be a less direct one. A large buyer, for example, might want to enable mobile access for his suppliers or a large seller might want to enable his customers or agents. In that case, the “big guy” could build his own facility or he could – and we think that’s the likely case – partner with an SP to provide this service. It’s faster, easier, and it might even, given scale and centralization, be cheaper.

There will likely be many applications that will drive the broad-based adoption of mobile technology. We believe that good, well-priced, reliable choices for conveniently storing and updating data are an important enabler to get the mainstream market started.