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« Lets Understand the Mobile Phone Market, installed base and smartphones vs dumbphones | Main | Bloodbath update for December, as we await EOY data for 2010 »

January 04, 2011

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Comments

simon andrews

fantastic article Tomi - really good stuff here, as usual.

Tomi Ahonen

Thank you Simon!

Tomi :-)

Nemus

I'm really grateful for this article Tomi, as your regular reader i knew many things you mention here before, but this is really epic stuff.

Thank you again.

Jonathan Madnick

As always, very thought provoking. I didn't read a single mention of common short codes when you talked about making money with SMS. In the US, common short codes are 5 or 6 digits. A human being's phone number is 10 digits in the US (###-###-####). So when my plant sends me a text that it's thirsty and I forward the text message to my robot to tell it to water the plant, am I getting and sending messages from regular phone numbers? If I then hear on the radio that I can win tickets to a concert tonight by voting for my favorite song when I hear it, instead of watering the plants, and I want to text to win while listening to the radio on my phone in the office at 3pm, or call the station while driving my car at 6pm, shouldn't I be able to call or text a single ten digit number?

Johannes Peltola

Tomi, life at it's best is when challenging your own creative boundaries to a boxing match, and winning by knock out.

For today, in the world of Mobile, You are Seppä Ilmarinen and this article is your Sampo :)

Michael O'Brien

Lots of good stats and well grounded in years of industry analysis. I think SMS will be challenged in mature developed economies as the likes of twitter enable immediate communication via I'M.

enyi

Tireless Tomi at it again. What kind of coffee are you on mate ? This is a blog of epic proportions; both in weight and depth. Now I have to get my SMS idea up and running asap.

Thanks

Hoi

Great article Tomi, although I do dispute the Mobile vs Telecom vs Internet numbers because they are not mutually exclusive. Mobile infratructure relied on wired Telecom infrastructure (not as necessary now but it was needed to seed mobile), and generic internet (Internet Protocols) is needed for many of the services that mobile is based on.

In terms of revenue opportunity, statistically what you say is true, but it also depends on context and market accessibility. e.g. a global media group or even a local media group will have a larger reach and accessible market than a brand new start-up. Premium SMS where you already have TV as your marketing channel is all great, but for a start-up, accessing these marketing channels is pretty difficult. Therefore the addressable market is completely different. It's the accessible segments that is key to what services should be targeted at and it's different depending on the stage of your company.

karen millen coats

Peace of mind from the minute you buy

karen millen dresses

We will not be beaten on price

steve epstein

Tomi,
Congrats on this enormous effort.

I agree with 99% of this post.
My 1% is that mobile web/ html5 may be of quick service for many languages and markets in lieu of WAP, or in parallel with WAP.


Simple mobile web pages, with simple forms to fill on short length pages, with click to talk or click to SMS, or a pre-formatted form can be created without WAP.

Can't the simplest of feature phones in Asia or Africa get Opera Mini over the top ? Or get installed at a top up kiosk ?

Granted flash and complex Java won't work etc...
but a straight forward mobile web site would not absolutely require WAP for commerce.

Couldn't a mobile web site for the fish market wholesaler, simply post HTML prices for each species ??
and a pre formatted form to submit an offer or counter offer while still at sea ?

I agree that WAP is still relevant worldwide.
I just think that in the developed world, mobile web with HTML5 in house may prevent having to track down WAP talent that is external.

In many ways, RSS with mobile HTML5 is a poor man's WAP site.

All the best....
Steve

Den

>Not apps, not location. Money in
>mobile SMS

you can combine location and SMS:
http://servletsuite.com/geomessage

Murat

There's money in apps if you have a awesome idea and execute it right. Simple as that. If you don't, well there isn't.

So to recap -
great ideas + great execution = bigger chance of success regardless
bad ideas + crap execution = less chance of success

You can apply both these formulas to any platform, including SMS, WAP and perhaps most things in life.

Tony Jamous

Hi Toni,

Agree with the analysis, especially that I bet my career on SMS, having rejected a six figure job after my MBA early last year to found Nexmo, a wholesale SMS API!

What is also impressive is the adoption by social networks of SMS notifications. Twitter and Facebook generated 5b SMS on AT&T and Verizon in Q4 2009 alone! These massive volumes have never been seen before in the mobile messaging industry...

Your post is very inspiring to the Nexmo team!

Tomi Ahonen

(am going to reply in stages with so many comments)

Hi Nemus, Jonathan, Johannes, Michael and enyi

Thank you all for the comments. I will respond individually to all as is our custom here.

Nemus - thanks. I had an 'epic' time obsessing about the article for five days, so haha, its nice to see some appreciated it too.. but it was one of those burning notions in my mind, thinking, 'nobody has said this yet, I GOTTA go write this..'

Jonathan - very good point and yes, common short codes are a vital technical element to SMS success in essentially every market. We have them in most but not all markets. I didn't think specifically of talking about them because I think of it more as the 'technical' implementation of a 'good' SMS experience, but also, even if you don't buy a short code, and just do very basic 'mom and pop' corner store SMS interactivity in consumer price (non discounted) SMS, it can still work for the small businesses.. But yes, good point, short codes are a significant element and boost the utility, convenience and thus adoption of SMS based mass market services.

Johannes, thank you! That is really touching. (and it will make my uncle and aunt particularly happy, they are big boxing fans haha)

Michael - very good point about IM vs SMS especially in mature markets. Now, consider the audience of the intended readers. I am not really suggesting the reader get a mobile operator/carrier license and build the network and 'launch' commercial consumer person-to-person SMS haha.. I really meant, with SMS, that any media, any service industry, even just about any telematics application can use SMS. And then it will often be the optimal channel for such customer service, media content, payment etc types of uses. While some heavy users of messaging (youth in particular) will indeed shift their person-to-person traffic to IM, the penetration level of IM and all social networking even on the internet, is far less than email still today. We spend more time with Facebook but FB doesn't reach anywhere near the number of people as email reaches. Then consider the time lag to mobile, it will be near the end of the decade before major IM platforms will be 'mass market' channels for most uses I mentioned in the article. So I do agree with you (the holiday SMS traffic numbers from Norway and Slovenia and Finland etc tell the same story, SMS traffic is down for the first year ever, as messaging heavy users shift to FB and Twitter etc) but the opportunities in this article are all very valid inspite of that.. Make sense?

enyi - thanks! I really appreciate it. And the coffee haha, well over that 5 day period I think I generated a record level of cappuchino sales to one customer at my nearest Pacific Coffee shop here in Hong Kong near my home, and then back at home, a mix of Pepsi, Mountain Dew, and more coffee haha..

Hey, enyi, you do need to do our SMS idea, and launch it, and then tell me so we can celebrate it here on this blog, ok? Thats the least I owe you for being a loyal reader here on the CDB blog over the years, eh?

Thank you all for writing, more comments coming to the rest soon

Tomi Ahonen :-)

Bartek

Thanks Tomi, hell of a great read! How about adding Ireland to the list of countries who greatly contributed to the development of mobile market? After all SMPP protocol was developed by there :).

Jonathan Madnick

Tomi,
I was actually trying to make the point that regular phone numbers can enable business to consumer and machine to consumer (and in reverse) sms communication. Short codes have done a lot for the market, but short codes are not the only implementation. Long numbers, long codes, virtual mobile numbers can do so as well. And they allow 2-way voice and text while short codes don't deliver voice. No?

Bob Shaw

Great Article Tomi. Not only have you provided a thorough analysis but you have stimulated a lot of new thinking regarding the opportunities created by the power of four methods of communication i.e.SMS, MMS, Voice and WAP. Thank you for spending your precious time on this article in the holiday season.

Greg Prescott

I agree with Jonathan, SMS Shortcodes have been the staple for carrying SMS traffic but now Retail, Enterprises, Mobile Marketers and ASP's can reap the many benefits of using LongCodes for SMS delivery. There is some great information on the differences between shortcode and longcode can be found at http://tsgglobal.com/press.html

Lars

Tomi:

Wow - serious effort.. Thanks! Now, with such a strong platform in place, the real fun is yet to come. Can only imagine where we'll be in another 10yrs.. looking forward to your 2020 review already.. 8-)

fate

SMS is dying, even the large players like Vodafone are seeing a decline in SMS profits as smart phones are taking over. Talk to any telco executive. WHat's this guy smoking?

Tomi Ahonen

Hi Hoi, karen, steve, Den, Tony

Hoi - good points. On the mobile/telecom/internet not mutually exclusive, fine, good point, but they tend to be for a vast part of the users, devices, networks, end-user prices, and user experience - different. Yes there is overlap but very little. Fixed telecoms is voice. mobile has moved past voice and primary use is SMS so they are not the same. Fixed telecoms is community phone (family phone, company switchboard etc) while mobile is totally personal, not shared. Etc. Same with internet. Handset vs PC, primary uses on phone are SMS and voice calls. on web its search and social networking. The pricing models totally different, mobile is per call, per message. internet is broadband flat fee and advertising, etc. I see your point, I think the overlap area is a very small part of the picture. On reach - the premium SMS example you said, is still valid for anyone, you don't need to be a giant media empire to use it.

karen - ?? thanks?

steve - good point about HTML, it is rapidly taking over the installed base more than 6 of 10 phones in use already support HTML. But its that 'no phone left behind' thnking where I do think 35% of the population who HAVE a phone (and many of who do occasionally surf some WAP pages on their simple phones) is way too big a segment to ignore. Then when HTML gets us 90% and WAP is the incremental 9%, then I think we can start to decide to forget about the WAP gang haha, not yet, not for a couple of years still.

Den - thanks

Tony - hey, thanks and my very best to all at Nexmo!

Thank you all for the comments, I'll return with more

Tomi Ahonen :-)

Tomi Ahonen

Hi Bartek, Jonathan, Bob, Greg, Lars, fate,

Bartek - yeah, good try, but not quite in the scale of Japan or Finland or South Korea, sorry..

Jonathan - ah, I see, yes, good point. There is clearly a lot of growth left in the long form SMS numbers, yes totally agree

Bob - my pleasure! happy you enjoyed it

Greg - cool. see muy reply to Jonathan

Lars - haha, and no doubt a third of all the stories I write in the next decade will originate from you or your links and contacts eh.. Cheers! Happy new year!

fate - You say SMS is dying. All the evidence is to the contrary. SMS just passed 4.2 Billion active users and the ITU predicts growth of 25% in total traffic from 2010 to 2011. No, SMS is anything from dead. That the profits are declining in SMS is inevitable over time - we modelled this with all major operators a decade ago - I personally was doing that with Vodafone's strategic planning (Vodafone itself says they used me in their forecasts) so we've seen this coming for a very long time. The point is that today, more than a decade after those projections, SMS still delivers half of European mobile operator total profits. That is astonishingly robust for SMS. That the profits are gradually declining is no sign of a problem, SMS is still by far the biggest profit engine (bigger than voice calls and MMS the two next biggest groups).

Thank you all for writing

Tomi Ahonen :-)

Phil W

Hi Tomi, I've noticed the internet articles on the report on the App stores that Distimo has compiled. Interesting that it is saying the marketshare of free apps has risen and the cost of paid apps has dropped. That looks to me like the App bubble may be beginning to burst?

Leebase

@Phil: Free apps generate revenue through advertising, in app purchases, and through upgrades to paid apps. The rise of free apps can be attributed to Android's popularity combined with it's poor app market purchasing setup.

Lee

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    Tomi Ahonen is a bestselling author whose twelve books on mobile have already been referenced in over 100 books by his peers. Rated the most influential expert in mobile by Forbes in December 2011, Tomi speaks regularly at conferences doing about 20 public speakerships annually. With over 250 public speaking engagements, Tomi been seen by a cumulative audience of over 100,000 people on all six inhabited continents. The former Nokia executive has run a consulting practise on digital convergence, interactive media, engagement marketing, high tech and next generation mobile. Tomi is currently based out of Hong Kong but supports Fortune 500 sized companies across the globe. His reference client list includes Axiata, Bank of America, BBC, BNP Paribas, China Mobile, Emap, Ericsson, Google, Hewlett-Packard, HSBC, IBM, Intel, LG, MTS, Nokia, NTT DoCoMo, Ogilvy, Orange, RIM, Sanomamedia, Telenor, TeliaSonera, Three, Tigo, Vodafone, etc. To see his full bio and his books, visit www.tomiahonen.com Tomi Ahonen lectures at Oxford University's short courses on next generation mobile and digital convergence. Follow him on Twitter as @tomiahonen. Tomi also has a Facebook and Linked In page under his own name. He is available for consulting, speaking engagements and as expert witness, please write to tomi (at) tomiahonen (dot) com

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