Sami Kettunen (presented and
modified by Jups)
Business models for
mobile services
www.republica.fi
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© 2001 Republica Corp.
Republica Corporation in
Short
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Republica Corp. www.republica.fi
FOUNDED: 1996
NUMBER OF EMPLOYEES: 70 (5/2001)
OFFICES: Helsinki, Jyväskylä
BUSINESS: e- and m-business infrastructure software.
Four software products ready to ship, first
implementations 6/2000
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© 2001 Republica Corp.
Republica Corporation in
Short
• MAIN PRODUCT: X-Fetch Suite;XML&Java component
and agent based e- and m-business infrastructure suite
including
• X-Fetch Agent Server
• X-Fetch Wrapper
• X-Fetch Unifier
• X-Fetch Performer
• IPR:Patents pending on the key areas of XML-based
content aggregating and XML->application parsing
www.republica.fi
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© 2001 Republica Corp.
What are mobile services?
• Services that you can use with mobile device
– Mobile – European sight (mobile phones, PDA´s)
– Wireless – US sight (PDA´s)
• M-commerce
– Mobile commerce is all kind of commerce where
communication, transactions or consuming is done
with mobile/wireless device
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© 2001 Republica Corp.
Mobile Evolution
Year 1990
Year 2001
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Markets are growing?
Mobile penetration
100
•Finland
•Norway
•Italy
•Japan
•Spain
50
•Austria
•Switzerland
•Netherlands
•Denmark
•UK
•France
•Sweden
•USA
•Germany
0
50
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100
Internet usage penetration
© 2001 Republica Corp.
Communication
Commercial
Functions
(Transactions)
Mobile
entertainment
(infotainment)
Value-added
services
Wireless
business
applications
Directory Services
News and info
services
Community
applications
Icons, ring tones,
games
Profiled content
Mobile intranet
3rd party
commercial apps
Dozens of other
applications
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© 2001 Republica Corp.
Mobile commerce
• Three main categories
– B-to-C – Internet-services
– B-to-B – Extranet-services
– B-to-E – Intranet-services
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B-to-C 1/3
• Communication
– SMS, chat
• Information services (SMS, push and pull)
– One message/order (weather info)
– One month (business news)
– Limited time (Neste Rally Finland)
• Targeted mass communication and advertising
– Group SMS for consumers (with permission, opt-in)
– Case Add2phone and snowboarding
• Alarm
– Stock prices (high-low)
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B-to-C 2/3
• Reminders
– Time based reminders – once a month/year
• Community services
– Mobile buddies, group SMS
• Personalization
– Logos, icons, picture messages, screen savers
• Entertainment
– Horoscope, biorythm, jokes, games, chat
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B-to-C 3/3
• Financial services (WAP)
– Stock broking
– Bank services (pay your bills)
• Internet/mobile based games
– Finland vs. Sweden ‘war’
– Habbo Hotel chat community
• Location services
– Where is the nearest gas station, and/or what is the price
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B-to-B 1/2
• Open your databases for your customers
– Mobile extranet
– Based on real extranet – same authentication
– WAP or SMS based
• Alarm services
– Supply chain management (low amount of raw material)
– Error information (network down)
– Risk management (time to call maintenance)
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B-to-B 2/2
• Reporting
– Usage reports (today you used 1 000 tons of oil)
– Follow up info (electricity stock info)
• Configuration
– Use website to adjust your tractor
– Adjustments will be sent to the tractor via OTA-file (Over the Air) – Case Valtra
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© 2001 Republica Corp.
B-to-E 1/2
• Databases/Intranet services
– Address book, CRM, ERP, management reporting, alarm systems
• Email, calendar, resource calendar
• Reporting systems
– Work allocation and follow up, logistics follow up
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B-to-E 2/2
• Information
– Push-info for target groups
– Desktop SMS
– News feed from own markets
• Location services
– Logistics follow up
– Emergency situations – where is the next service person?
– Radiolinja and health organisations tested this in Helsinki region – how to find nearest
ambulance?
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© 2001 Republica Corp.
Social services
• Home care - trials, some succesful
– The home helpers make orders with communicators
from the residense of the elderly
• Health care - still to come
– Call centers
– Health data from everywhere any time
• keyed in
• sensored
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Authorities
• Some opinions in favour of closed official
networks
– extra features
• recording, tracking, locating, securing
• EMP-resistance
• Fines for speeding
– SMS used by the Finnish traffic police
• retrieve speeder’s gross income from tax databases
• The Finns got 30% richer in one night!!!
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© 2001 Republica Corp.
How to make money with mobile
solutions?
• Operators are winners
– Developers and content providers accuse operators having
too high comissions
– Consumers are not willing to pay 5 FIM/message
• Are consumers ready to pay?
– Time management
– Time wasting
• People with company phone use value added services
• Corporate users – office tools
– Email, calendar and information services
• Mass market entertainment services
– TV Chat, icons, ringtones, chat, dating services,
community services, group messages, games…
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© 2001 Republica Corp.
Value Chain of Mobile
Markets
Problems
Problems
Technology
Platform
Vendors
Infrastructure
& Equipment
Vendors
Application
Platform
Vendors
Application
Developers
Operating systems
WAP, HSCSD,
Middleware
Mobile platform
and microbrowsers
GPRS, EDGE,
and standards
applications
(Openwave, Nokia,
UMTS (Nokia, (Nokia, Phone.com, (Yomi Vision,
Ericsson, Microsoft) Ericsson, Siemens, Ericsson, ETSI,
Akumiitti,
Motorola, Lucent) WAP Forum,
Dr. Materna,
UMTS Forum)
Add2Phone)
Problems
Mobile
Portal
Providers
Mobile
Network
Operators
Problems
Mobile
Service
Operators
Handset
Vendors
Content
Providers
Content
Aggregators
Content
(Reuters, CNN,
Yahoo,
Kauppalehti,
SM-Liiga...)
Content
aggregation
(Digitallook.com,
Sanoma-WSOY)
Problems
Handset and
SIM Retailers
Customer
Application
Operators
Value Added
Handsets
aggregation
(Vodaphone,
Services
(Nokia,
(Radiolinja,
Sonera, Telia,
(Saunalahti,
Ericsson, Motorola,
Sonera Zed, Orange, Mannesman,
Buumi.net,
Philips, Microsoft...)
Telia MyDOF,
Telenor....)
Keltainen Pörssi,
T-D1@T-Online,
Alma Media/MTV3.fi)
BT Cellnet Genie)
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Retailers
(Mäkitorppa,
Setele,
Tietopuhelin,
Luurikauppa...)
Based on Mobile Commerce Report, Durlacher
© 2001 Republica Corp.
Operators Value Chain
Terminal
vendor
Subscription/
access fee,
Service
charge
Handset
subsidies
Bulk handset
purchase
Content
provider
Hosting
applications and/
or third-party portal
Customer
Site fee
And/or
Revenue
sharing
Site fee
Big portal player,
eg. AOL,
Yahoo! etc
Site fee
Mobile operator
And/or
revenue
sharing
Pays
site fee
Pays for hosting/
portal service
Banks/financial
service
providers
Cut of transaction
Advertiser
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Retailers
e-commerce
merchants
Lähde: Ovum
© 2001 Republica Corp.
Pricing of mobile services
• Monthly fee – flat rate
– News service – 50 FIM/month
• WAP-SOLO – 4 mk/month + data connection
• Transaction fee – pay only when you use
– Ringtone – 5-10 FIM/download
– Chat – 5 FIM/message
– Vote in TV program – 3,50 FIM/vote
• Time based fee
– Start fee (0,60 FIM) + 1 FIM/minute
• Free service – paid by advertisers
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© 2001 Republica Corp.
Mobile software – pricing models
• How mobile start-ups and others valuate their
software
• Fixed price
– One time licence fee
• User amount based pricing
– Registered users – XX USD/1000 registered users
– Weekly visits in the site
– Step by step pricing
• Revenue sharing (risk revenue sharing)
– 10-50% from the client fees
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© 2001 Republica Corp.
Value chain of mobile services
Content
provider
Content
provider
Gramex or
other
Content
packager
Operator/
ISP
Customer
Technical
integrator
Advertiser
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© 2001 Republica Corp.
Value Chain and Money in B-to-C
2 FIM
1,5 FIM
- 5 FIM
Content
packager
Operator/
ISP
Customer
1,5 FIM
2 FIM
1,5 FIM
Content
provider
Content
packager
Operator/
ISP
1,5 FIM
Content
provider
Customer
- 5 FIM Advertiser
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© 2001 Republica Corp.
Value Chain and Money in B-to-C
Content
provider
1 FIM
Gramex
or other
- 5 FIM
4 FIM
Operator/
ISP
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Customer
© 2001 Republica Corp.
“Literary and artistic works“in the
Net
IPR owners
writers, composers, artists,
performers, AV-producers, etc.
(The representatives maintain
Works
register of works:
The IPR owners
Gramex, Teosto, Kuvasto, Kopiosto) can decide upon using
and
performing the works in the net
Service providers
Utilize the works in creating content:
Responsible for the protection
Fees to the IPR owners
(their representatives)
Operators
Arrange the channels and data transfer
- no fees, no responsibility
Public instutions
Libraries, archives, universities
Compensate internal use
(low rates)
Consumers
Browsing: no fees to the IPR-owners,
but to operators
Packaged works: pays the price
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© 2001 Republica Corp.
Value Chain and Money in B-to-C
0,2 FIM
4,8 FIM
- 5 FIM
Content
provider
Content
packager
Customer
Integrator
Advertiser
Content packager has own WAP-gateway (case Keskisuomalainen)
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© 2001 Republica Corp.
Operators Revenue in the Following
Years
• Where they will make the revenue
–
–
–
–
–
–
Airtime 60%
End user fees 17%
Content 10%
Advertising 5%
Mobile e-commerce 5%
Hosting services 3%
Source: Ovum
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© 2001 Republica Corp.
Mobile service start-ups
• No risk money available
– Venture capitalists are not willing to fund mobile
technology anymore
– Where is the revenue?
• Clients are not investing
– Operators are not investing at the moment
– 3G licence and network costs are huge
– When they are going to buy some applications?
• Bankruptcy?
– Many players will go down
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© 2001 Republica Corp.
How Technology Will Change?
• Faster networks and handsets
– Fast access
– Allways on connection
– Better software in handsets
• Java Card –technology
– You can download software to you
handset
• Smart House –concepts
– Always with you - manage your house with mobile
phone
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© 2001 Republica Corp.
Source: Durlacher
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© 2001 Republica Corp.
Thank you!
Questions and discussion
sami.kettunen@republica.fi
+358 40 3011 135
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© 2001 Republica Corp.