The future of wireless
technology and its impact
on e-business
Presentation to
Loyola University GSB
Dr. Linda Salchenberger
April, 2000
Anna Hillers
400 N. McClurg Ct. 1912
Chicago, IL 60611
Evolution of wireless technology
Wireless meets Internet
Everything – everywhere - always
Best-in-Class Segment Players
Trends and Emerging Business Models
Anna Hillers
1
Evolution of wireless technology
Wireless meets Internet
Everything – everywhere - always
Best-in-Class Segment Players
Trends and Emerging Business Models
Anna Hillers
2
GSM
Global System for Mobile Communications
With 200 million subscribers world wide and international coverage, GSM is
the most successful digital mobile telephone standard
Conversion:
Analog/Digital
Encoding/
Compression
BTS = Base
(Transceiver)
Station
MSC= Mobile
Switching Center
BTS = Base
Station
Mobile Phone:
Data, Voice
Global System for Mobile Communications (GSM) Features:
• SIM (Subscriber identity module) allows for identification independent from phone
• International Roaming (worldwide)
• Voice and Data Service (SMS, 2 way messaging -> 14.4 Kbit/sec)
• Call forwarding, Caller ID, Wait/Hold, Voicemail
Anna Hillers
3
Upcoming Standards
HSCSD, GPRS, EDGE, UMTS
HSCSD, GPRS, EDGE are GSM-based standard, which enhance data
transmission through enhanced software. UMTS, the European version of
3G will reach up to 2Mbit/sec through higher bandwidth.
HSCSD: High
Speed Circuit
Switched data
GPRS: General
Packet Radio
Service
EDGE: Enhanced
Data Rates for the
GSM Evolution
3G: Third
Generation
(UMTS)
• Circuit Switching:
• Allows for ISDN speed: 56.7Kbit/sec
• Introduced 1999 by some GSM carriers
• TCP/IP protocol (Internet protocol), supports a wide range of bandwidth
• Allows for up to 115 Kbit/sec
• Will be introduced by the end of 2000
• Allows for up to 384 Kbit/sec
• Will be introduced by 2001
• Increase of bandwidth
• Allows for 2 Mbit/sec
• Will be introduced by 2002
Anna Hillers
4
UMTS
Total mobility
Integrating other systems, UMTS will offer total mobility with a trade off
between mobility and capability, leading to different levels of service
International
Roaming
Next
country
2.4-9.6 kbit
(rest of world)
Major roads:
<384 kBit
City: 2 MBit
Suburbs: >384 kbit
<115 kbit (GSM)
Anna Hillers
5
UMTS
Technical features compared with GSM
UMTS is downward compatible to GSM technology but will be capable to
offer advanced features beyond existing GSM systems
UMTS
• Up to 2 Mbit mobile packet data
• Up to 384 Kbit mobile video
GSM
• 9.6 Kbit/s data, up to 112 Kbit/s with
GPRS
• Fixed/mobile convergence of protocols
• Up to 64 Kbit/s mobile video with
HSCSD
• Switching platform based on GSM II+
• Services similar to ISDN
• Wide range of terminals: voice, data
only, multimedia
• GSM switching platform
• Downward compatible to GSM
networks
• Coverage limited but roaming
available
• Primarily voice terminals,
first organiser announced
• No compatibility to other networks
• Full coverage, worldwide roaming
Anna Hillers
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UMTS
Development path
The present differences in coverage and service between GSM and UMTS
will disappear in future as GSM evolves, while UMTS expands coverage
Service/Capacity Speed
UMTS
• UMTS will initially only be available in
urban areas, relying on GSM outside
covered areas
• Early UMTS terminals will only offer limited
service (speed data <64Kbit), later
developing towards high speed 2Mbit/s
services
UMTS
GSM
GSM
• GSM is the standard with highest mobility
(coverage footprint) worldwide
Coverage
• GSM will develop data up to 384 Kbit via
GPRS
Anna Hillers
7
UMTS
Time schedule for introduction of UMTS
The EU requirement will force UMTS licensing in most EU countries during
year 2000 but Japan and UK will take the lead
Licensing
Preparation
Mid 1999
UMTS auction
in UK
Licensing of
UMTS I
Year 2000 in
UMTS licensing
period
License condition
in D, DK, F, S
(others) published
Service
development
Licensing of
UMTS II
EU allows
max. 12 month
licensing delay
March 2001,
DoCoMo plans to
launch UMTS in
Japan
Jan 2002,
UMTS to be
launched in
Europe
The three major stakeholders are
1.
Customers, which demand service
2.
Telecommunications operators, which want to stay ahead of the competition
3.
Governments, which strive for the highest price
Anna Hillers
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UMTS
Example for UMTS licensing in the UK
Not only telecom companies might apply for UMTS licenses but also nontelecommunication firms such as IT-companies and equipment suppliers
Non-telecom companies
Telecom companies
Industry Groups
• Virgin
IT-companies
 Microsoft
Distributor
• European telecom
3-5 UMTS licenses
are currently
auctioned
Service provider
• debitel
• Mobilcom
• Talkline
• Airtel
Regional players
• Cellnet
• Vodafone
• Orange
• Hutchison
Eurpean players
• Vodafone-Airtouch
• Telia
• Deutsche Telecom
Fixed network operators
• Internet SP
• Energis
• NTL
License includes
• 4 licenses with 2x15Mhz + 5Mhz unpaired each
• Service requirement: 80% population coverage =70% area by the end of 2007
• License limitation for 20 years
• No mandatory roaming, but roaming expected by government
Anna Hillers
9
Evolution of wireless technology
Wireless meets Internet
Everything – everywhere - always
Best-in-Class Segment Players
Trends and Emerging Business Models
Anna Hillers
10
Wireless meets Internet
Middleware/Critical Services
WAP
The wireless application protocol (WAP) is the standard for bringing
content, commerce, and other value-added services to wireless networks
and mobile devices.
Client
WAP Gateway
Encoded Request
Origin Server
Request
Encoders
and
Decoders
User
Agent
Encoded Response
CGI
Scripts
etc.
Response (Content)
Content
WAP Programming Model
Benefits
• Globally open standard that has already reached critical mass (80% of the
industry)
• Enables easy, secure access to relevant Internet/Intranet information and
other services through mobile phones, pagers or other wireless devices
• Provides the technology to develop, deploy and support wireless
application, namely e-commerce
Anna Hillers
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Wireless meets Internet
Middleware/Critical Services
Bluetooth
The Bluetooth phenomenon will likely have a powerful impact on this
industry in the near future.
Description
Applications
• An evolving specification of shortrange radio frequency being
developed with most wireless
vendors and some PC
manufacturers
•
• Enables networking between
devices within a range of 10
meters (30 feet through a radio
frequency link in the unlicensed
2.4 gHz band)
•
Wireless access to peripherals
– Connection of PCs with printers, faxes, other peripherals (e.g., PDAs)
•
Ad hoc conferencing
– Facilitate ad hoc meetings (e.g., airports, hotels) that include data-sharing
•
Integration of digital cameras with mobile digital devices
– Can send pictures directly from a Bluetooth-equipped camera to a PDA, notebook, or printer; or
it could transmit to a wireless network
• Will be embedded in most cellular
phones and laptop devices by the
end of 2000 and cost between $5
and $15 per module
Device-independent mobile data
– User could use Bluetooth to receive an e-Mail on a PDA from a notebook without having to
power on the notebook
– User could access the Internet via cell phone while receiving Web pages on a laptop or PDA
• Will be capable of speeds
approaching 1 Mbps
• Backed by an alliance between
Intel, Nokia, Ericcson, Toshiba,
and IBM
Implications
• Reduces burden of creating single, complicated, small devices
• Improves connectivity between devices
Anna Hillers
12
Evolution of wireless technology
Wireless meets Internet
Everything – everywhere - always
Best-in-Class Segment Players
Trends and Emerging Business Models
Anna Hillers
13
Current Industry Dynamics
The Global Field
At this early stage of development, the market for mobile data over cellular
services will be more developed in Europe and Asia than in the United States.
Current Situation
• Thanks to the consistent GSM Europe and
Asia are ahead of the fragmented U.S. market
.
• The U.S. have seen higher growth in part of
the value chain, which is closer to the Internet
(middleware, value-added services, content,
commerce).
• Wireless “smart” phones dominate in Europe
and Asia, while PDA-based wireless units are
more prevalent in the United States.
16
• Migration toward 3G will fuel more uniform
growth globally.
• Mass market will fuel need for high capacity
data transmission
Europe
U.S.
Asia/Pacific
1998
1999
2000
2001
2002
2003
Cellular Data Users by Region
(millions of subscribers)
Europe
12
U.S.
8
4
Asia/Pacific
0
1998
Future Trends
• Multinational cross-border partnerships will
blur geographic distinctions.
SMS Users by Region
(millions of subscribers)
50
40
30
20
10
0
1999
2000
2001
2002
2003
Worldwide Smart Handheld Device Shipments
(millions of units)
1998–2003 CAGR
12
10
U.S.
32%
Japan
42%
Western
Europe
Rest of
World
8
6
38%
67%
4
2
0
1998
1999
2000
2001
2002
2003
Anna Hillers
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Current Industry Dynamics
Wireline Versus Wireless Networks
Growth of Data Traffic
We have seen explosive growth of data traffic over wireline networks in the
past 10 years. In the next five to seven years, an analogous explosion will
occur over wireless networks.
Migration to Data in Wireline and Wireless Networks
Market Growth Forecasts
100
100%
Incumbents Evolving
to IP-Based Networks
IP
Data
Wireline
Incumbents Revectoring
Evolution to IP-Based Networks
New Entrants Using
IP-Based Networks
Traffic
Carried by
Carrier
Networks
New Entrants/Lead
Incumbents Evolve to
IP-Based Wireless
Mass Market
ISP/e-Commerce
50
50%
Client/Server Business
(IT) Solutions
Browser (Netscape)
Technology Adoption
Application
Enablers
Business/
Commercial
Wireless
Sub-$100
Devices
MicroBrowsers
Air Interface
Improvements
Network
Improvements
Lower $/MOU
Incumbents
Focused on Voice
Voice
“The compound annual
growth rate (CAGR) for
wireless data from 1996
through 2003 is projected to
be 35%. The market is
expected to reach close to $2.5
billion by the year 2002.”
Source:Frost & Sullivan Market
Research.
“Two million wireless data
subscribers existed in 1997.
Over 40 percent average
annual growth is expected
through 2002.”
Source:U.S. Mobile Data
Marketplace.
Mass Market Voice
100%
0
1990
1990 1991 1992 1993 1994 1995
1995 1996 1997 1998
1998 1999 2000 2001 2002
2002 2003 2004 2005
2005
Source: Nortel Networks and the Yankee Group.
Key
Messages
• Wireless will follow wireline model.
• Network evolves to an IP architecture as data traffic carried
over the network increases (more than 50 percent).
Anna Hillers
15
Current Industry Dynamics Technology meets customers
Opportunities in the mobile data market are immense.
Convergence
Customers
Convenience
Simple Text
Wireless
Connectivity
Corporate/
Institution
e-Mail
Business
PC Usability
and Power
Internet
Access
Content
Consumer
The convergence of three
strong and powerful industries
is creating a flood of
opportunity.
Applications, once confined to
large corporate infrastructure,
are finally becoming available
and affordable to the mass
market.
Commerce
The true potential has yet to
be realized. The evolution of
advanced content and
commerce will cause this
market to explode.
Anna Hillers
16
Current Industry Dynamics
Technology and Market Barriers
Several technology and market barriers exist to impede the rapid
development of wireless data services.
Technology Barriers
Device Ergonomics (Form Factor)
Market Barriers
Lack of “Killer” Apps
Data Security
Cost of Access
Data Throughput
Cost of Handheld Devices
Network Reliability
Pricing Models
Network and Technology Standards
Integration of Various Components
Perceived Value to Customer
Anna Hillers
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Current Industry Dynamics
Technology Barriers
Current Initiatives
Trends indicate that most of these technology and market barriers are
expected to be addressed in the next two years by several key enablers.
Technology Trends
Throughput
GPRS, EDGE and UMTS
will increase transmission
speed
Network coverage and
infrastructure is improving
(build-out)
Device
Ergonomics
SIM Applications, WAP
will improve the interface
Data
Security
Equipment and
middleware providers are
addressing security
Network
and Technology
Standards
WAP is becoming a
standard protocol,
Migration paths to 3G are
developed
Lack of
“Killer Apps”
Cost of Access
Intranet/extranet
browsing
is vital to mobile work
force
Increased Customer Value
Network
Reliability
Integration
of Various
Components
Market Trends
Prices will fall similar to
the wire line industry
Cost of
Handheld Devices
Devices with serverbased micro-browsers
cost considerably less
than devices with built-in
micro browsers
Pricing Models
Providers must develop
new pricing schemes
Bluetooth will improve
connectivity
Anna Hillers
18
Current Industry Dynamics
Mobile Data
Mass Market Applications
Over time, as wireless technology and the Internet have evolved, mobile
data services have finally begun to penetrate the mass end-user market.
Type of Service
Content
e-Mail Services
Drivers of
Mass Market
Adoption
Internet Access
Wireless
Knowledge
Intranet Access
Improved Reliability
and Speed of
Wireless Networks
Development of
Data-Capable
Information Devices
News
Text-Based Information Services
Large-Scale Use of
the Internet and
Dependence on It
Financial
Travel
Weather
AccuWeather
Sports
Entertainment
Content
Aggregators and
Distributors
e-Commerce
Anna Hillers
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Evolution of wireless technology
Wireless meets Internet
Everything – everywhere - always
Best-in-Class Segment Players
Trends and Emerging Business Models
Anna Hillers
20
The Wireless Value Chain
To best capture the abundance of opportunities available in this growing
market, we must understand the dynamics of each value chain segment.
IT
Telecom
Infrastructure
Create
Technologies
and wireless
architectures
Access
Devices
Phones
Pagers
PDAs etc.
Carriers
Provide
wireless
voice
access or
Internet
access
Middleware/
Critical
Services
Software that
optimizes
networks and
Browser
capabilities
ValueAdded
Services
Large range of
services:
Synchronization,
Commerce
enabling
applications,
Document
compatibility
Content
Create and
bundle
Content
for providers
Provide
Application
tools
Commerce
Common
Web
Commerce
services
• What role does the segment play?
Key Issues
to Understand
• Who are the leading participants?
• What are the most significant trends in each
segment?
Anna Hillers
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Value Chain
From Content to Customer
Today, multiple content distribution models exist – some models gain
advantage of value chain disintegration, by providing more direct service
Carrier
Value Added Services
Content Sources
Wireless
Device
Wireless
Device
Wireless
Customized and
Packaged Data
Services
Value-Added
Information
Reseller
• Infospace.com
• Intelligent Information
Incorporated
WAPCompliant
Device
Carrier
Network
and Proxy
Content in
Server
WML Format
(Phone.com)
Web Content in HTML Format
• Online Anywhere software
converts Yahoo! content to
a wireless format in real
time
Selected Network of
Content Providers
• Reuters
• CNN
• The Weather Channel
WWW
• Converts HTML Web
documents into WML, thus
readable by WAP-compliant
wireless devices
Anna Hillers
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Market Forces by Value Chain Segment
Access Devices
The wireless access device serves a critical function as the primary
interface between the user and data applications.
Wireless
Handsets
Qualcomm
PDQ Phone
• Europe/Asia will
see first devices
• Data entry
methods will also
need to improve
PDAs
Mobile Computers
Modem Devices
Others
3Com Palm VII
Sharp Mobilon
Tripad
Sierra Wireless
Aircard 300
Rocket eBook
from NuvoMedia
• An extremely
large market will
open up when
throughput rates
increase to 115
kbps and beyond
• Market will
flourish since it is
a compelling
alternative to
purchasing
wireless-ready
devices
• Wireless
applications for
nonstandard
devices will begin
to gain
acceptance as
the market
continues to
mature
• Windows CEbased PDA will
become an
increasing threat
to Palm
dominance
• Increased
competition
Anna Hillers
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Best-In-Class Segment Players
Access Device 3Com Palm Products (Palm VII)
Palm computing has shot to the forefront of convenient, handheld
Internet access products with the introduction of the Palm VII.
Key
Success
Factors
Maximize revenue streams from product sales, service,
licensing and commission on commerce
Increase customer base through shift from “organize” to
“access” information
Key Initiatives and Strategic Direction
• Hundreds of content providers signed up for
content provision
• Wireless manufacturers are creating wireless
attachments
• Joint venture with Aether to form Open Sky –
offer services nationwide over any standard
Effectiveness
• Connection speed is limited at 8 kbps
• Pricing structure somewhat limited in usage.
• Limited success for the Palm because of
distribution only in New York. Technical, billing,
customer support, and other issues need to be
worked out as well.
pdQ-800
pdQ-1900
Target Market and Services
• Consumer and business markets.
• Device offerings include the
Qualcomm PDQ phone and the
Palm VII.
• Internet access and wireless
services available through
BellSouth’s Wireless Data network
covering 260 U.S. regions
Business Model
• Revenue streams: product sales,
recurring service revenues, licensing
agreements and commissions on
commerce transactions
• Service provided is branded by Palm
(Palm.net). Service revenue potential
ranges from a cost of $120 to $300
per year, shared with Palm
Strategic Positioning
• First to market, solid reputation,
brand name recognition
• Palm VII has a slight change in
target market: Goes from “people
who want to organize their
information” to “people who want
to access information.”
Anna Hillers
24
Market Forces by Value Chain Segment
Carriers
The growth of wireless subscribers, coupled with strong Internet growth,
are the primary drivers for the service provider market and will lead to new
relationships and increased competition between carriers
Opportunities:
Internet +
Wireless =
• An increase in Internet use results in increased air-time for service
providers, and increased revenue per user.
• Ability to provide Internet and e-Commerce-based services will increase
“lock-in” and reduce churn.
Equipment
Manufacturer
Network
operator
ISP
• New relationships between network operators, IPS and wireless
equipment manufacturers all aiming to provide wireless access and
content
• Incumbents and new entrants are racing to sign up content providers
and establish relationships
Anna Hillers
25
Best-In-Class Segment Players
Carrier GoAmerica
GoAmerica is a new breed of service provider that specifically targets
the mobile data market.
Key
Success
Factors
“one-stop” shopping concept for nationwide
wireless data services through strategic partnerships
with equipment makers and content providers
 Focuses on building brand image
Key Initiatives and Strategic Direction
• Formed partnerships with Yahoo and Ericsson
Wireless Solutions
Target Market and Services
• Offers services to corporations
carriers, and mobile professionals.
• Offers an interactive Web content
service
• Service is compatible with several
popular devices.
Effectiveness
• Reached strong market penetration for its
services
• Teams up with best-in-class players to provide
its services
Business Model
• Resells air time from AT&T.
• Acts both as a content aggregator
as well as a wireless service
provider and provides content
aggregation services on a
wholesale basis.
• Offers wireless services to
traditional ISP
Strategic Positioning
• Positions itself as the leading
nationwide wireless ISP
• Partners with best-in-class service
providers, content providers and
device manufacturers such as
AT&T, 3Com, BellSouth Wireless
Data, and Wireless Knowledge
Anna Hillers
26
Market Forces by Value Chain Segment
Middleware/Critical Services
The middleware segment includes a broad variety of software solutions,
often consisting of a client/server architecture designed to optimize the
mobile link.
www-Protocol Stack
Server-Level Middleware
Network Protocol
Client-Level Middleware
Device Value-Added Services
and Applications
Device OS
WAP
Protocol
Stack
Other Server-Based Middleware
GPRS
SAMA+
IS95-B
CDMA+
WAP
Client
Other Device-Based Middleware
(Nettech’s InstantRF, Smart IP . . .)
Micro
Browser
Windows
CE
e-Mail
Fax
Symbian’s
EPOC 32
SMS
Other
Other
Apple’s
Newton
Anna Hillers
27
Best-In-Class Segment Players
Middleware/Critical Services Phone.com
Phone.com’s positioning as the converter of mass market phones to
wireless “companions” has been a huge success.
Key
Success
Factors
Positioning as the ubiquitous standard for wireless
Internet applications (creator of WAP)
Market leadership with strong penetration to all major
carriers and manufactures worldwide.
Key Initiatives and Strategic Direction
Effectiveness
• 75% of the wireless phone browser market
under multi-year contracts to embed its product
into new devices
• 31 global carriers under multi-year contracts,
some of which are prepaid licenses
• Contracts with a lot of manufacturers to use
technology in their next phone generation
• Phone.com’s unique platform is the only
integrating Internet and wireless system.
• “push” data to its customers, increase
customer loyalty (by reducing churn), and raise
potential revenue per user (RPU) are strong
incentives for carriers and phone subscribers to
use Phone.com’s technology.
Target Market and Services
Business Model
• Offers platforms for carriers and
for device manufacturers, Content,
and Network Management
Systems
• Software optimized for mass
market wireless telephones,
supports all wireless protocols, and
is operating system and processorindependent.
• 2 sources of income: Serves as a
bridge between device
manufacturers and carriers
• Push Server technology allows for
increased revenue potential
• Network management and content
applications cater to carrier and
developer markets, respectively
Strategic Positioning
• First-to-market leader in wireless
and Internet integration (Former
Unwired Planet)
• Set the standard for wireless data
services through its leadership of
the WAP forum.
• Major competitive threats are
Nokia, Ericsson, and Microsoft
Anna Hillers
28
Market Forces by Value Chain Segment
Value-Added Services
Value-added software providers create applications to enhance the ease
with which wireless/Internet devices function.
Sample Value-Added
Service Offerings
Synchronization
 The segment is very young and highly fragmented.
 Many services, once considered value-added—
such as e-Mail—are now essential.
Conversion of Software
 Large device manufacturers are generally not as
concerned with true interoperability as the
consumer; therefore, the role these entrants play
will be important.
Information Management
 Some device manufacturers have shown strong,
proactive interest in developing these services, as
evidenced by Motorola’s involvement in Starfish.
Access Software for Content
and Applications
 Overall, this segment will continue to grow rapidly.
Anna Hillers
29
Best-In-Class Segment Players
Value-Added Software AvantGo
With its product expertise in transforming “Web content” to “wireless
data” and its capability to aggregate numerous content partnerships,
AvantGo is positioning itself to become a true “wireless portal.”
Key
Success
Factors
Strives for industry leadership through high profile
partnerships
Bundles e-Commerce opportunities with content
channels
Key Initiatives and Strategic Direction
Effectiveness
• "wireless portal” for Palm OS and Windows CE
devices, like AOL for desktop PCs
• 40 Fortune 500 companies use AvantGo to
provide mobile information
• Bundling agreements on devices from HP,
Phillips, Casio, Palm Computing, IBM, and
Symbol
• Supports hundreds of thousands of registered
users of both Palm OS and Windows CE
handheld devices
Target Market and Services
• Enterprise product and a free
consumer service.
• Scalable solution for transferring
data and applications onto
handheld computers.
• Personalized content offline or
wirelessly in real time—anytime,
anywhere Compatible with
PalmOS/Windows CE platforms
Business Model
• Mobile enterprise solutions and
Web-based application hosting to
Fortune 1,000 companies
• Partnerships with a variety of
content providers
• Free service as a promotion for
business solutions
Strategic Positioning
• Spearheading the Mobile Link
initiative, an open industry
standard for connecting mobile
devices to server-based
applications
• Microsoft and 3Com are investors.
AvantGo serves as an
independent software vendor (ISV)
to both
Anna Hillers
30
Market Forces by Value Chain Segment
Content
In today’s wireless data market, there are three main groups of companies
that are providing content to all types of wireless devices.
Information
Suppliers
Description
Players
Value-Added
Information Resellers
Web
Portals
• Media and news
companies that author,
publish, and syndicate
content
• Act as intermediaries by
aggregating, customizing, and
transforming Web content
• Resell content and services
primarily to carriers and/or
end-users
• No brand presence on the
Web
• Act as intermediaries by
aggregating, customizing, and
transforming Web content
• Large brand presence and
subscriber base on the Web
•
•
•
•
•
•
•
•
•
•
• Yahoo! Mobile
• MSN Mobile
• AOL Anywhere
CNN
Reuters
The Weather Channel
Fidelity
• Basic news, financial and
weather information
Features
Intelligent Information Inc. (iii)
AvantGo.com
GoAmerica
Infospace.com
@Mobile
Palm.net
• Personalized content including
news, financial information,
and weather alerts
• Limited content
• e-Mail, calendar tools, and
targeted e-Commerce
• Personalized content including
news, financial and
entertainment information
• Large breadth and depth of
content
• e-Mail, calendar tools, and eCommerce
Anna Hillers
31
Best-In-Class Segment Players Content Yahoo!
Yahoo! is positioning itself to be the leading content provider for
wireless Internet users.
Key
Success
Factors
Continue to build strategic content distribution agreements
with a number of wireless service providers.
Increase revenue stream by incorporating more contentdriven commerce opportunities and value added services.
Key Initiatives and Strategic Direction
• Acquired Online Anywhere, a provider of Web
delivery solutions for non-PC appliances, which
tackles the non-PC market
• Announced several wireless content
distribution agreements: PageNet, Sprint PCS,
Palm Computing
Target Market and Services
• Users of Palm and Microsoft CE
computing platforms
• Markets Yahoo mobile! Via Yahoo
site
• Targets Yahoo!’s existing 35 million
subscribers and that of its
wireless partners’ (Sprint PCS,
PageNet)
Effectiveness
• Strong commitment and investment by Yahoo!
• Difficult to assess since wireless Internet
access and content distribution is in a very
early stage
Business Model
Strategic Positioning
• “Stickiness” shall generate
revenues through Yahoo online
storefront and auction site
• First portal to align itself with a
service provider to provide Web
access
• Fees for the distribution of
personalized news and content
alerts to pagers and PDAs
• Personalized content and direct
marketing
• Wireless partners for access to
Yahoo content “anytime and
anywhere”
• International expansion
Anna Hillers
32
Market Forces by Value Chain Segment
Commerce
With WAP as a standard and mobile Internet access growing, wireless
e-Commerce is set to explode.
Online Banking
Online Stock Trading
• Discount brokerages
already offer wireless stock
trading
• Fidelity has teamed up
with Palm to offer
brokerage services
Players
• Fidelity
• e-Trade
• Mydiscountbroker.com
• Banks will push their
services to wireless
users
Players
• Wellsfargo.com
• Paybox.com
• Citibank
Players
• Amazon.com
• Buy.com
• Barnesandnoble.com
• eBay and SkyTel have
partnered to provide
auctioning services to
SkyTel’s two-way
paging customers
Players
• eBay
• onsale.com
• Yahoo! auctions
Entertainment
Wireless
User
• Showtimes.com
currently transmits
showtimes to Yahoo!
mobile users; next step
is to sell tickets
• Look for traditional
ticket houses to sell
tickets wirelessly
Retail
• Books and CDs represent
low-cost impulse purchase
opportunities for wireless
users
• Expect significant wireless
e-Tailing
Auctions
Travel
• Ability to purchase
airplane, train, and
bus tickets and
reserve car and hotel
reservations
Players
• Travelocity
• Expedia.com
• Biztravel.com
Players
• Ticketmaster.com
• Showtimes.com
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Best-In-Class Segment Players
Content/Commerce Intelligent Information Incorporated
Intelligent Information Incorporated is striving to make the user experience
more personalized, a key success factor in this industry.
Key
Success
Factors
Increase number of content distribution partnerships
with wireless service providers
Expand content and services to meet the immediate and
high value-added needs of users
Key Initiatives and Strategic Direction
• Partnered with AT&T Wireless to provide
personal news service for its digital/PCS
subscribers.
• Customer base: 50% of the largest U.S. paging
carriers and 8 PCS/digital cellular carriers
Target Market and Services
• Provides wireless personalized
and customizable information and
consumer e-Commerce services
by creating a “wortal”
• Markets content and services to
wireless carriers and media
enterprises
Effectiveness
• Ability to customize information leads to
reduced churn and increased revenue per user
through longer on-phone times and more
outbound calls.
Business Model
• Revenue through the distribution of
content to wireless service
providers and new media
enterprises.
• Value-added services to wireless
carriers: customer care and billing
for news services
Strategic Positioning
• Cooperation with Nokia for
activities focused on supporting
WAP and the growing demand for
mobility
• Developing local/national content
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Evolution of wireless technology
Wireless meets Internet
Everything – everywhere - always
Best-in-Class Segment Players
Trends and Emerging Business Models
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Trends and Emerging Business Models
Trends
Partnership and alliances fuel the current evolution, however it is unclear
how the customer can reached and who “owns” him or her
How would wireless
E-Commerce
be marketed?
What Type of
e-Commerce Opportunities
Should Be Delivered?
Who Keeps the
Transaction Revenues?
User
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Emerging Business Models
The Device-Centric Model
The new Palm model is a compelling example of how a device
manufacturer can capture value in this new industry.
Access
Devices
Infrastructure
Carriers
Middleware/
Critical
Services
ValueAdded
Services
Content
Commerce
Palm.Net
Customer
Experience
User logs
on to
Palm.net
Customer
purchases
Palm VII
device
mySimon.com
User compares
prices and reads
reviews through
mySimon.com
User auctions for
product on eBay
$$
$$
$$
Value
Captured
“Traditional”
revenue
stream
$600
Retail
price
Additional
potential
recurring
revenue
stream
$10–$25
per month
mySimon and
other content
providers strike
deals to embed
software on Palm
Palm earns
commission on
transaction
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Trends and Emerging Business Models
The Carrier Owns All
In a carrier-centric model, the carrier truly “owns all”—the service, the
content, and most importantly, the customer experience.
Infrastructure
Access
Devices
Carriers
Middleware/
Critical
Services
ValueAdded
Services
Content
Commerce
Select Content/Commerce Partnerships
WWW
Wireless
Customer Pays for Network
“Air Time” and Access to Content
Revenue
Flows
Select Content and Commerce Partnerships
• Customer pays carrier for network “air time” and access to content.
• Models can vary: Subscription-based, pay-as-you-go,
and “free device/charge for service.”
• Carriers pay content aggregators and suppliers.
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Trends and Emerging Business Models
The Wireless Portal: “Wortal”
In the “wortal” business model, established Internet portals still provide
free content, thus successfully owning the customer in the wireless world.
Access
Devices
Infrastructure
Carriers
Middleware/
Critical
Services
ValueAdded
Services
Content
Commerce
Wireless
WWW
Pays for “Air Time” and Not Content
Selected Content/Commerce/Applications
Revenue
Flows
Other Companies Pay for
Advertisements and
Marketing Services
• Customer pays carrier for network “air time”
(i.e., flat monthly service fee or per-minute usage rate).
• The “wortal” earns revenues from advertising and
targeted marketing services for e-Merchants.
• Content is free for end-user.
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Trends and Emerging Business Models
Summary
The success or failure of wireless Internet will depend on the capability of
all participants to offer superior value to the customer
Success?
Wireless
+
Internet
• Commitment of big players
• Mobility is a customer need
• 3G = ww success like GSM
• 2 Mbit/sec will be needed
Bubble?
• Volatile stock markets
• Fierce competition
• 3G = 3rd generation or
third failure
• Inherent fixed infrastructure,
2Mbit/sec = overkill?
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