THIS IS PART B

1
Customer/ User View
mCommerce Business Models

Business Models
Infrastructure Investments
2
From Place to Space to Mobility

• Mobile applications will change the way
• we all live, play, and do business
• - Kalakota and Robinson, 2002
• By 2004, 40 of e-commerce
• transactions outside of U.S. will be via
• portable cellular enabled devices
• Gartner, 2000
• 3 of U.S. wireless customers plan to
• make purchases using their cell phones
• WSJ, 2001
• M-Commerce will be worth 26 billion if
• the industry can keep breathing until 2006
• Frost
  Sullivan,2002

Any where
Any time

Any one

3
mCommerce Policy Frontiers


4
mCommerce Definition

• involves some communication between
• two or more humans or inanimate objects
• one party must be mobile while engaged
• in a communication
• connectivity is maintained during
• movement
• at least one of the involved humans seek to
• benefit economically short-term or
• long-term
• - Balasubramanian, et al,
  2002

Any where
Any time

Any one

5
Research Study

• Questions
• What are emerging mCommerce business models?
• What are implications to an enterprise core
• capabilities and infrastructure?
• Methodology
• Interviews with Leading Companies
• - Over 25 companies
• - USA, Sweden, Finland, Hongkong, Japan
• Interviews with 30 Mobile Focus Groups
• - USA, Finland, HongKong, Japan
• - consultants, entrepreneurs, housewives,
  teenagers, sales,
• maintenance, hobby groups

 
        
Questions Motivation Value Proposition Flows of
info, , product Roles/Responsibilities New
Competences Sourcing Strategies Ownership
Issues Day-to-Day Mmgt Lessons

.
6
Companies in Research
7
Strategic Intent for mBusiness
gt 50 of applications
25 of applications
Integrated
Separate
Access Platform
Hybrid Channel
Minimal user Behavior Changes

• Mobile Internet provides
• integrated capability
• adding value to current
• Internet activities

• Mobile web is an alternative
• channel to access Internet /
• Intranet, Extranet

Fundamental Behavior Changes
mBusiness Model
Social Innovation

• Mobile offerings will
• create new social behaviors
• and even new social orders

• Mobile services will
• have different business models
• from wired Internet applications

8
Access Platform - Examples
Vertical Application
Horizontal Application
Extension Of web
Restaurant Supply Co. -Sales automation -
Hewlett Packard - eServices for employees
Northwest Airlines - Crew Notification
Enhanced web

• Electronic components
• Distributor
• Syndication of catalogs
• to contractors
• - m-ordering

Merrill Lynch
- Voice portal for virtual teams
9
Hybrid Channel- Schwab

• Project Highlights
• Fidelitys Instant Broker
• Fifth channel
• anytime anyplace
• consistent customer experience
• Playing in the space is the only way to learn
• Separate wireless organization
• Used 3rd party for initial implementation later
  in house development
• and other benefits documented

• Challenges
• Integration with existing
• channels
• Immature technology transmission speed,
  interface, processing capability
• Underestimated growth of the channel and
  infrastructure requirements
• Complexity of managing ever growing number of
  devices

10
Sample Hybrid Channel IT Architecture
External Systems
Application Server
B to B Server
Mobile Web Server
WWW
Application Server
Database Server
Web Server
Legacy Systems
IVR
11
New Business Model A4Media Oy

• Revenue from Personalized, Real-time, and
  Localized Content
• PopWAP
• Mobile movie and music companion
• FirstAid
• Help at the touch of a button
• WAPCaddy
• And the winner is in your pocket
• Your personal golf assistant
• DanceAid
• Waltzing with WAP
• Business Etiquette
• Make your way around the world

12
Social Innovation Upoc mobile communities

• users join message groups or start their own
  around a shared theme or interest
• an example NYC celebrity sightings (members
  send messages when they spot celebs in New York
  City)
• users can join or create public, private or
  secret groups

13
From Strategic Intent to Sustainable Business
and Revenue Models
Separate
Integrated
Access Platform
Hybrid Channel
Minimal user Behavior Changes

• High time value of information
• Decisions where faster
• processing decreases costs/
• increases revenue
• Enablers of mobile workers

• Same customer operating
• across multiple channels
• depending on context
• (time, place, identity, mood)
• Context changes the
• nature of customer need

Fundamental Behavior Changes
New Revenue Model
Social Innovation

• Differential pricing, customer relationships,
  and IP rights across different channels

• Community/social group
• applications
• user driven improvization
• and service design

14

mBusinesss Model Case of i-Mode
Application Alliance Partners 985
companies/ 1500 websites (67 partners in 2/99)
i-mode subscribers 23,058,314 User
increase 40,000-60,000/day
42,224 voluntary i-mode Internet web sites, 100s
search engines (10 on 2/99)
Corporate Use Intranet and VPN (i-Mode specific
sw)
15
I-mode in Japan
(Subscribers)
million
19.777
14.037
8.290
4.466
2.235
0.523
0
1999
2000
2001
16
I-mode users by age group
Unknown 2
Under 20 7
Over 39 27
20-24 24
35-39 8
25-29 20
30-34 12
17
I-mode menu sites by category
Ringing tone downloading
Games
Transactions Banking
Stock trading Ticket Reservations, etc.
Entertainment Horoscopes Character
downloading Club guides, etc.
Information News Weather forecasts
Local events, etc.
Databases
Telephone directories Restaurant guides
Recipes Dictionaries
18
NTT DoCoMo i-Mode

• Database
• Town page
• Dictionaries
• Traffic information
• Restaurant guide
• Cooking recipe

• Transaction
• Mobile banking
• Securities/insurance
• Credit card Information
• Ticket/Airline booking
• Publication purchase

E-mail

• Entertainment
• Network Game
• Ringing tone
• Character image
• FMRadio/TV Info
• Horoscope, Karoake

• News and Information
• News, Weather
• Town Information
• Stock Quotes
• Horse Racing Info

Internet Web Sites
Information Bill Collection System for IP
Portal Service Based on User Profile DB
DoCoMo Packet Network
19
2000 ARPU Analysis NTT DoCoMo vs. Europe
ARPU avg revenue per user/mo
i-ModeTotal 80.23
70
60
EuropeTotal 36.40
50
Voice
40
Content
30
20
Text messaging
10
0
i-mode
Europe
DoCoMo
subscription
(2000)
(march 2000
to March
Source Yankee Group, June 2001
2001)
20
i-Mode is an EcoSystem
Modified from Gartner, 2001
Unofficial Content Providers (URL
access) Bulletin boards, Chat
Platform and App. Developers Sony, IBM,
Microsoft
Brand and Scale
cHTML
Application process
Application process
Official (i-menu) Content Providers Cybird,
Index, Bandai, AOL
NTT DoCoMo
Retail Businesses Tsutaya, Pia, Lawson
Specifications
Mobile Transactions
Financial Institutions Banks, securities firms,
Credit card companies
Handset Suppliers Sony, Panasonic, NEC,
Fujitsu, Hitachi
21
DoCoMos i-Mode Revenue Model

Voice Communication Charge
E N D U SER P A Y S
Advertising by D2
i-Mode Usage Fee 300 Yen/month
Official Site Content Charge Max 9 of 300
Yen/month
Packet Transmission Charge 0.3 yen/packet
Billing on behalf of Content providers
Outside of i-Mode
Content Providers
Fixed Revenue
Variable Revenue
22
i-Modes Business Model

• Win (i-Mode)Win (User)Win (Merchant)
• Centered on mobile communication device
• Affordable, volume-based pricing
• Both proprietary (connectivity) and open
  (content) business model
• Ownership of customer, customer data, and NTT
  network protocols
• Open Content Garden official i-menu cluster
  with voluntary i-mode community
• Innovation at Internet speed (with quality
  control)
• Strong alliance and partnership strategy
• Rejects the Law of Digital Content Information
  Wants to be Free

23
Lesson Closed and Open Business Models Co-exist
Brand
Brand
Content Context Infrastructure
Content Context Infrastructure
Marketplace
Marketspace
24
i-Mode Two Faces
Open Model
Closed Model
i-Mode Community Brand
i-Menu brand

• Appeal to broader
• user base
• - Broader liability

- Monopolistic control
25
eBusiness Models

• Place to Space Migrating to
• Ebusiness Modelsby Peter Weill and Michael
  Vitale
• e-business model .
• Roles and relationships among a firms
  consumers, customers, complementors, suppliers,
  and employees that identifies ... flows of
  product, information and money and the major
  benefits to participants.
• Atomic business models

Which ones are present in i-mode?
26
Lesson All Atomic Business Models Present in
i-Mode Community

• Direct to Consumer
• Index
• Content Provider
• Bandai Networks
• Full Service Provider
• DLJ Direct
• Virtual Community
• Snowborder

• Intermediary
• i-menu
• Value Net Integrator
• Global i-Mode

How does mobility add value to models?
27
Lesson Avoid the Web Fallacy

• mBusiness is not about ubiquitous computing!
• mBusiness is about
• ubiquitous communications
• communication driven business models
• Peer to peer architectures for communications