{ 01 JUNE 2010 }
The Internet on the go,
the companies to stay
The mobile Web has gained enormous momentum. But it is not new companies
with stand-alone business models that are thriving; rather, the mobile Web is,
in essence, an additional distribution channel and extension of the established
Internet community. Thus, it is Internet frontrunners that are conquering the
mobile world.
By the end of this year one billion people will have access to 3G technology, and half of them will own a smart phone or a global wireless modem to surf from wherever they want – impressive figures from Morgan Stanley´s latest mobile Internet report. This report on the 5th computing cycle since the 1950s also highlights that the number of mobile devices might exceed the number of human beings in the coming years: cars as well as homes and offices will soon be equipped to connect people to the Internet. The mobile Web is gaining importance even faster than its predecessor, desktop Internet computing. It only took two years for the iPhone to win more than 50 million users, while pioneers of the Internet age, like Netscape, needed much longer to attract the same number.
Five developments are driving mobile growth
The accelerating popularity of the mobile Web can be
explained by the coincidence of five developments:
AFFORDABLE TARIFFS
The success of 3G technology after its roll-out, which started in 2001, was initially hampered by prohibitive price structures. But now, flat rates are paving the way for permanent mobile access.
USER-FRIENDLY DEVICES
The introduction of the iPhone in summer 2007 was the tipping point for the mobile Web. Innovations by Apple as well RIM have fundamentally changed the way mobile devices are used, spurring the development of a fast-growing market. In the first quarter of 2010, nearly half of all new mobile phones in the UK were smart phones.
THE APPLICATION REVOLUTION
In July 2008, Apple started the app store with some 500 applications. Only 20 months later the number has crossed the 200,000 line – quickly penetrating other platforms.
THE DAWN OF LOCATION-BASED SERVICES
Mobile access to the Internet has brought about a "local" dimension, which has led to the integration of smaller vendors and service providers into the global Web and opened up a huge opportunity for a new generation of attractive Internet services.
THE INSATIABLE DESIRE FOR
SOCIAL NETWORKING
The main growth driver for 2010 and beyond is, without a doubt, the consumer´s desire to stay connected. An ever increasing number of people want to share messages, information, photos, music play lists and even videos at any place and any time.
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Established players are driving
the new innovation cycle
Unlike former tech cycles, these new developments are not being led by newcomers with disruptive technologies and revolutionary business models. Instead, established Internet giants, like Apple, Facebook and Google, are driving this new innovation cycle. And sector leaders, like music-streaming service Spotify and recommendation portal Qype, are extending their leading positions by integrating mobile services into their business model.
Spotify, a pioneer in cloud media services, allows users to listen to their favorite music without downloading it, while offering its services everywhere on many devices and across many platforms. For Spotify, the mobile Web is just a natural extension of its service.
Recommendation portal Qype is also making the best of both Internet worlds. The Qype mobile client allows users to read and write reviews of local services and places while on the go. And users love it! Already more than ten percent of all reviews are generated by mobile devices – and the number is growing fast. The company supplies mobile sites in seven languages and across all major platforms: the iPhone and Android apps were downloaded 500,000 times in the first year after its launch. These apps automatically fix and display the location of places and special offers nearby. The ability to combine social networking with recommendations to help people locate small businesses, using mobile devices, will define the future of Qype´s business.
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Mobile and fixed Internet form one market
The success of Digital Media companies in the mobile world shows how much the latter is interwoven with the classic Internet. And a large number of Internet services are following the lead in making use of the mobile channel. These include gaming as well as e-commerce and video streaming. The last-named alone will represent two-thirds of the mobile data traffic by 2013, according to Morgan Stanley. Many of the existing mobile services will benefit from the tendency of consumers to follow their trusted Internet services into the mobile world. It is a fact that only three years ago the most popular destinations of mobile users in the UK were websites of the carriers. Now, the pole position belongs to brand names, like Google, Facebook and YouTube. In such an environment it is still unclear as to what extent new and dedicated mobile services will have the chance to become large businesses in their own right. Nevertheless, there are some early stars appearing, among them our portfolio company Aloqa. The company has a powerful location triggered push platform and runs a free mobile service that proactively notifies users about interesting places, services, events and coupons close to where they are. Only a few months after the launch, Aloqa has over 750,000 global downloads and has already convinced customers like Payback.de, Coupons.com, dozens of social local publishers, leading mobile OEMs, and network operators to adopt their platform.
So, is the hype about mobile exaggerated? Definitely not! Mobile technology is fundamentally changing the way consumers and companies use the Internet, and it will enlarge the fields of applications dramatically. It will be interesting to observe how far the consumer´s desire for mobility and constant access will drive the success of the mobile Web. |
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