how brands can create value from apps

and the role of the mobile operator

Mark Watts-Jones@MWJOpenMIC, OxfordDecember 2010

and the role of the mobile operator

This is what I’m going to say…

1Who are your users?

and why we should develop for specific customer needs

2Operators are brands

and how brands can create value from their apps

3Operators and apps

as carriers/operators rather than brandsand apps

4 Devicesand why mobiles are not yet all smartphones but might end up that way

5 A final thought Is London 2012 the next tipping point?

Who are your users?1 Who are your users?and why we should develop for specific customer needs

In the UK there’s 60 million mobile consumers – it’s fair to say that they’re not all the same

1

They have different life stages, expectations, experience, capability and importantly money

1

Average monthly spend:

PAYM: about £45PAYG: about £12

So the simple point is to target your apps at specific customer

groups

Operators are brands2 Operators are brandsand how brands can create value from their apps

Selling direct is tough – some apps succeed but there’s a lot of competition for consumers 59p’s

2

…so lets have a think about other ways that apps can create value

for brandsfor brands

‘Value’ can be created in different ways…2

One overriding principle:

Apps should directly benefit how brands

1. Raise revenue

2. Stimulate mobile commerce

3. Save cost

4. Extend reach

5. Improve brand perception benefit how brands create value from their day–to-day

business

5. Improve brand perception

6. Improve customer engagement

7. Advertising/brand extention

8. Differentiate product

9. Lock in customers

1. Raise revenue - charge for app/in-app purchases2

1. Free app with In App recipe purchases

2. Revenue oriented

3. Extends Jamie Oliver’s reach into new content

4. Supports book sales?4. Supports book sales?

Jamie OliverJamie’s Recipes

Free

2

1. Stimulates new revenue opportunities

2. Highly integrated with online

3. Focuses on convenience for customer

2. Stimulate mobile commerce

4. Extends Tesco’s reach

Tesco Tesco Grocery

Free

2

1. Reduces calls/emails to expensive call centres

2. Convenient and immediate for the customer

3. Encourages regular interaction with brand

3. Save cost

with brand

4. Opportunities for cross promotion

O2 My O2Free

2

1. Extends Rightmove reach into new channel

2. More convenient and immediate for the customer

3. Obvious consumer benefits e.g. search for property when mobile,

4. Extend reach

search for property when mobile, uses location

RightmoveFree

2

1. Is really about customer engagement

2. Adds richness and extends customers experience

3. Encourages regular interaction with brand

5. Improve brand perception – give customers something they value

with brand

4. Reminds the customer about the benefits of Orange

OrangeOrange Wednesdays

Free

2

1. Positioned as a useful utility

2. Encourages regular interaction with brand

3. Extends Starbucks reach

4. Trojan horse for future Starbucks

6. Improve customer engagement – help the brand get and keep in touch

payment card/reward points features?

StarbucksMy Starbucks

Free

2 7. Advertising/Brand extention – support a campaign or extend brand

1. Supports the Waitrose Christmas advertising

2. Adds richness and extends customer experience

3. Extends Waitrose reach

WaitroseWaitrose Christmas

Free

4. Encourages interaction with brand

2 8. Product differentiation

1. Strong innovation in core Nike business of training shoes

2. Delivers great feature differentiation

3. Significant addition to Nike customer experience

Nike Nike+£1.99

customer experience

4. Encourages regular interaction with brand

5. Huge PR benefits

2 9. Customer lock-in

1. Customers can only use the app if they continue as a Sky customer

2. Adds richness and extends customers experience

3. App is the ‘face’ of strong product

Sky Sky+/Sky Mobile TV

Free

3. App is the ‘face’ of strong product differentiation

4. Reminds the customer about the benefits of Sky

…but then there can be too much of a good thing!2

Operators and apps3 Operators and appsas carriers/operators rather than brands

Operators will continue to customise and brand devices and apps

3

• This is the £99.99 Orange San Francisco Android on PAYG

• Shipped with Android 2.1

• Great hardware spec

Takeaway:

Android prices will fall, market share will soar in Q4

2010+ andAndroid strongly perform in

mainstream customer groups

Operators App Stores of one kind or other will continue to emerge

3

As will loads and loads and loads of others3

Some will be bigger than others… Don’t ignore Nokia3

• Symbian may be resurgent or on it’s last legs depending on who you believe but…

• Nokia have a massive worldwide installed base worldwide installed base

• the Qt framework seems better

• They have loads of cash to invest

• And decent operator relations

Devices4 Devicesand why mobiles are not yet all smartphones but might end up that way

Total market share by manufacturer (in UK)4

Still dominated by Nokia, SE, Samsung

Sales of new mobiles by OS (in Western Europe)4

High growth in smartphones, still lots of Symbian

Forecast sales of smartphones (in USA and Canada)4

Smartphones soon dominate the whole market

Source: Morgan Stanley

And why is this important?4

Much higher use of data for smartphones

A final thought5 A final thoughtIs London 2012 the next tipping point?

London 2012

Ubiqiuitous Wifi?

High levels of smartphone and tablet use

Mobile coverage on the Underground?

7 There’s a few things coming together around 2012

Contactless ticketing and payments for all events

Live content streaming