Don't Go for the Fool's Gold in Mobile. There is Real Gold for you

I have been monitoring several discussion streams on Twitter and the blogs and it hit me that many technologists are now pursuing opportunities that are fool's gold. These opportunities shine real bright, alluringly inviting investors to waste resources trying to get to them. But underneath the shine there is no gold. Now, in mobile there is tons of real gold out there, 250 Billion dollars worth of mobile data service revenues in 2009 which makes mobile bigger than radio or cinema or the gaming or music businesses globally. Mobile data is even bigger than the total internet industry. And its no secret where the real money is. But still, very bizarrely there is bewildering focus by so many 'experts' on the fool's gold.

LOCATION-ISTAS

What do I mean. Lets start with the 'locationistas'. This thought-to-be-extinct breed of technology-purists, feel that if you make it more accurate, the consumers will come. It does not matter at all to these 'alchemists' that all the evidence of more than a decade now, prove conclusively that the customers will not come. Yet they persist in peddling that tired old wives-tale, that 'there is a pot of gold in location-based services'.

Location-based services. Yet another variation of 'tell me where I am' or 'tell me where my friend is' or 'tell me where something else is'. This nearly vanished type of engineering passion suddenly re-emerged out of California when Apple put GPS onto its second edition of the iPhone in 2008. And while Nokia had quietly had GPS and maps on many N-series phones for a couple of years, suddenly the usually-very calm and smart Nokia too got the bug of location-based services.

So, today one of the hottest stories in any West Coast related tech investor and innovator groups is the collection of ever more mad ideas around location-based services, games, ads, apps etc. And tons of investment dollars and expensive developer resources are tossed at recreating fantastic precise location-based services to find out where is the nearest cash machine or toilet; where is the wife or kids; where am I; and various navigation aids, location-based games, coupons, ads etc. What a waste of effort. Futile. Totally futile.

It is true that the mobile data opportunity is experiencing dramatic growth now, and has in fact been the fastest-growing hundred-billion-dollar industry of the past decade. It grow very strongly even last year when most similar industries like television, advertising, print, personal computers and the internet industries all declined in value and tended to make enormous losses. Mobile data grew and made record profits.

So if mobile data grows, yes, even the 'dogs' ie the very poorly-performing parts will grow somewhat. Like location-based services. But think of this, excepting for a few vehicles and parcels and business assets -tracking types of business apps; essentially all location-based services have underperformed. Dramatically. For a whole decade already. Yes, its not that somehow with the iPhone 3G in June of 2008, the 'location-based opportunity' was created.

No, your clever location-based service, whatever the concept - has existed for many years before that, most have existed as commercially launhed services for more than a decade all around the planet. So all of those clever ideas of today, have actually been launched in Finland and Germany and Italy and Japan and South Korea - ten YEARS ago. Then some are tempted to say, but that was not with GPS. You are wrong. The world's most advanced mobile phone mapping and location and navigation service - EZ-Navi out of Japan - was upgraded to fully GPS-enabled ..in 2001.

EZ-Navi is so advanced today, it makes most concepts of location-based services I hear of, seem like the stone drawings of cavemen. EZ-Navi is super-science fiction, thats how far it is. EZ-Navi is so advanced, they've already created a full 3D visual mapping of all of Tokyo. This type of initiatives are 'long term plans' for most cities. EZ-Navi's precision-mapping navigation will show you any city block view from where you stand, and what you should see - where is that Tokyo copy of the Eiffel Tower? Oh, there it is, we should walk in this direction... EZ-Navi will let you pick what type of route you want to use - ie if you are walking, and want to take the route with the least number of stairs to climb (ie using escallators rather than stairs) - or equally the opposite, to get maxium 'exercise' ie walking max number of stairs. Or if you forgot your umbrella, EZ-Navi will show you the route where is most 'overhang' is through shopping malls, underground tunnels etc - as not necessarily shortest route, but the route that keeps you from getting wet, the best..

Maybe I am wrong. Yes, thats obviously possible. But if you are investing time, your team effort, resources, money, marketing and PR effort etc to any location-based service, please consider the facts. Since 2000, when major mobile service categories were first mapped out and published - location-based services have been the second-worst growing category of them all! (with only video-calling doing worse). Yes, MMS 'picture messaging' has outperformed location-based services. Yes WAP, famous for 'WAP is crap' has outperformed location-based services. Religious services outperform location based services. Cartoons and books for heaven's sake, outperform location-based services. 3G what some called the greatest economic failure in tech at one point in the past decade - has outperformed location-based services.

If for ten years, literally thousands of compaines have launched tens of thousands of services with supremely accurate technologies on fantastic handsets etc, perhaps its time to admit this is likely not the real eldorado for mobile. It is perhaps fool's gold. And like the fool's gold of the Wild West, it will draw ignorant pilgrims who will come and invest in what they do not understand and end up owning total junk. Your location-based services will mostly end up not worth owning.

Now, a great business concept may have a location-based dimension and be a big success. We can have a social networking service with location. They are not a success because of location, they are a success because of the social network. We can have augmented reality - like Layar - and it is definitely possible to do augmented reality with location-information (like Layar) - but its not the only way you can do augmented reality. You can also do augmented reality for example with special 2D barcodes as the famous Ford Ka campaign illustrated. So Augmented Reality is cool. Location is not. Location is one possible way to trigger augmented reality but its location is not what makes it awesome, it is the Augmented Reality part.

Same for coupons and discounts served via location. Why limit your coupon to the location? Coupons and discounts can be successful, they don't need location to be so. It is better to get permisson from the recepients and have them indicate what types of goods and products they prefer for which they'd like coupons and discounts. That is solid marketing work, and location is not relevant anymore. We get something better. And we don't need to limit it to GPS-enabled smartphones; and we don't need to pay mobile networks for the meaningless location-positioning data.

If you want to do great coupons for your customers, get their permission, then send them MMS coupons. No need to pay for location-information, and rather than limit your total possible audience to the 13% of all mobile phone owners on the planet who have a smartphone (and a small fraction of those who have GPS), you can send the MMS to the 80% of all phones that sit in the pockets of the economically viable part of the planet. Essentially anyone who can affford whatever it is you want to advertise, will have a phone that does MMS. And you don't need to limit it to the location. Take me. I live in Hong Kong. But my fiancee lives in Brazil. I would be very happy to take an offer of flowers sold in Brazil - and would buy them even when I am on another continent (try that for how wrong Location-based ads are), and certainly not buy them here in Hong Kong for myself..

APPLICATION-ISTAS

And then we get the other even bigger hype right now, peddled by the snake-oil salesmen and miracle cure  hoodlums I call the Applicationistas. A despicable breed of desperados who prey on the naive innocent pilgrims who are going west in search of fortune. Apps is fool's gold, pilgrim, stay away from apps. Especially any app store apps. That is a stacked game where you cannot win. You are like the paleface who walks into a saloon in the Wild West, fresh off your covered wagon, and you see a table of poker, and think that the game is honest. It isn't. And you are the victim.

So why all the hype. Remember where the apps fanatics came from, they came from the internet and PC apps industry. They once were told that if you build enough eye-balls, the money would miraculously appear. That size was everything, but revenues did not matter. Very respected experts and major business news fed thousands of stories that there was a 'new economics' that applied to the internet. If you built it big enough, you would be able to make money (in some imprecise way). Well. that hoax turned into a house of cards, fronted by swindlers such as Worldcom. And those who were lucky got out before the first hype cycle crashed - AOL 'bought' Time-Warner and never grew to its 'potential'. That whole era - less than a decade ago, was symptomized by 'I have millions of users of a free service, but some day we will make money out of them'. And they didn't. Google was a rare exception, not by making money out of millions of eyeballs, but by inventing a new format for relevant ads called Adwords. Yes, they were served on Google's search results, but Adwords would have been a success even if Google wasn't the biggest internet company. The same idea was adapted by Flirtomatic to its 'First Face' ads - and Flirtomatic has 2 million members. The idea is good, it didn't need the size of hundreds of millions of Google users to succeed.

Now fast forward a decade. Suddenly from 2008 we hear of Apple's App Stores having a billion downloads. Then two billion. Now its past 3 billion downloads. The big number magic potion again. "If its a billion downloads, gosh its gotta be good, I gotta gets me some of that". WAIT. Stop and wait. Where is the money? Most of these apps are free. MOST of them are free. Can you not hear the warning bells in your mind? Are we really that dumb? Its only a couple of years since we had the big dot-com bubble - an economic bubble - that burst. Free? Free apps? Come on, this is exactly the same sillly 'new economics' model from the previous dot-com crash. Hello pilgrims, didn't you learn anything from the previous generation? ("No, Mistah Ahonen, my pa, he went and bought some fool's gold and it was nice and shiny and he did go broke, but I am not afraid to go and buy me some of that fool's gold too, and get me some of that shiny stuff and it will make me rich.") How crazy are we?

What of the paid apps. The biggest category of paid apps for the iPhone are games. Duh? The Playstation Portable and the Nintendo Gameboy have had a lucrative market for games, very much of the same scale as what the iPhone gets in its games sold on the App Store. Is this now a new eldorado? No, it means that the gaming opportunity in our pocket is growing - just as the mobile and wireless and portable gaming experts (including this one) projected from before Apple said anything about an "App Store". The iPhone is a great gaming phone! So great, that Microsoft is bringing Xbox games to their mobile operating system, and SonyEricsson is now rumored to bring out a PSP-phone this year.

Every one of those 150,000 apps on the Apple App store had to be developed. I have seen estimates that it costs something like 15,000 to 50,000 dollars to develop an app for the Apple iPhone. Lets do quick math. If there are 150,000 apps in the App Store and it cost say 30,000 dollars on average to develop one, so far gullible managers have paid.. wait for it ..4.5 BILLION dollars to develop those apps. And Morgan Stanley told us that Apple iPhone Apps total revenues in 2009 were about what, 780 million dollars - of which Apple kindly took 30% as the kind store-owner to the fool at the so-called gold mine. (this is so exactly like the ignorant pilgrims who bought really expensive mining goods from the general store of the nearby town. The palefaces went to the mountains in futile attempt to find real gold, and the shopkeeper got rich)

So the total income after more than a full year of Apple App Store sales - to the total developer community (after Apple took its cut) is about 546 million dollars. So, at this level - if there was no further development costs for any of these apps - and no inflation - and no marketing costs of any kind - just from the revenue-share to the developers assuming perfect case of everybody earning equally, the current investment in the first 150,000 apps would be paid back by... the year 2018. Yes, eight more years - in the perfect case. In reality the mathematics of economics means that a few hit products will take the lion's share and in reality you will not get your money back, not even in many decades of 99 cent downloads. 

That is your best case, pilgrim. In fact, the App Store is a game of roulette where the house always wins, but it has not only one zero (normal Roulette, house wins) nor a double-zero (like Roulette wheels in Las Vegas which cleverly have doubled the amount of money the house collects). No, the apps game is so stacked against you, there are more multiple-zeros than total roulette winning chances. Why. Because only hit apps will be on the bestseller list. And only bestseller list apps have any chance of a mass market success and recouping their investment. And you won't get to the popular list unless you are first, or a known global brand, or very clever and innovative to the degree of patentable creativity effort - preferrably your app should have all three and even then its no guarantee of commercial success. So yes, the chance for you has passed, not last year, but it passed way back in September 2008, and since then its become a giant pyramid scheme, feeding Apple, helping hype up the app store, selling more iPhones and iPod Touch's, driving the hysteria of tech journalists and 'experts' but which won't earn you money.

Yes, and just like in Las Vegas, there will be a few, very random, very lucky winners. They will be paraded and celebrated in the fool's game of duping more developers to try their luck in this rotten casino game they call app store apps. On that luck you have absolutely no control. You cannot influence your luck in the app store apps game. And the rules of this game are stacked so badly against you, that you won't be one of the winners. You will lose your shirt in this, the ultimate mug's game. Your money will be taken, your app listed (probably) and you will not make back the money you invested. This, long before we add the marketing efforts and your various other integration and development costs.  

And its nothing against Apple. The same is equally true of Android, Nokia Ovi, Windows Mobile etc. Any app store. Currently, that is not a viable business model. It is pure hype. It is the re-birth of the free model that was so much the rage with the dot-com bubble.

By the way, an iPhone is in the pocket of 0.5% of the planet's population. In its best market, the USA, you get an 'impressive' 3.5% of the total population. Thats it. Not more. The facts are absolutely indispatable. any admob nonsense-stats will not change the picture, there were only 11 million active iPhone users last year according to AT&T and thats 3.5% of the US population. That is not a mass market in any marketing textbook. It is a tiny niche market. And if the world average for the iPhone is 0.5%, if the US is 7 times better, then obviously most of the rest of the world is even far worse than that one half of one percent penetration. Meaningless. Even if your app becomes a 'bestseller' on an iPhone.

Windows Mobile, Palm and Google Android are far smaller than that in their installed bases. RIM's Blackberry does a bit better; it can reach a whopping 1.2% of the total population of the world. And the most prevalent smartphone operating system of them all is Symbian which will get you into the pockets of an amazing 4.4% of the worldwide reach of humankind. Most of those Symbian devices would be Nokia branded smartphones. Don't kid yourself. None of the smartphones will reach anything approaching a mass market. Not for many years to come. So even should your smartphone app be popular, you are by definition limiting yourself to a target market equivalent to say, the reach of luxury sports cars like Porsche and Ferrari. Its not like you are offering a Ford or Honda to any car buyer.

REAL GOLD

The mobile data services industry was worth more than 250 Billion dollars last year. About 150 Billion was out of mobile messaging (mostly SMS and MMS messaging) and nearly 100 Billion dollars worth of 'premium data' ie non-messaging mobile data services and apps. Yes, I said apps, but the apps form a tiny percentage of this number, and those few billions are mostly business apps - sold to enterprises for their secure data access to their CRM and billing and email systems. Like say on the Blackberry. But not sold in apps stores. That is long-term corporate/enterprise app development, so yeah, if you're happy to develop with say SAP, and do a VPN secure access to an ERP solution, and then go to say the insurance giants and convince them to buy 10,000 licenses of your app - then yes, there is money in apps for you. It'll be costing you far more than the Apple iPhone app would, and the sales staff you need and sales cycles will be more like years than weeks, but yeah, sure there is some money in apps for business. A couple of billion (a couple of percent of the total opportunity). But thats like the industrial mining done in the Wild West long after the gold rush had passed. I am talking of a real eldorado here, not fool's gold and not the long hard drive for business oriented apps. I am of course talking about services.

We have a 110 Billion dollar global commerical opportunity in SMS text messaging related services. We have another 27 Billion dollar global commercial opportunity out of media services in MMS multimedia messaging - from TV videos and sounds, to newspaper pictures and stories - delivered via yes MMS. And we have a massive further opportunity on various web-style 'browser-based' services, from limited 'mobile web browser' WAP and i-Mode to 'real browser' xTML services.

These are not sexy. Its basic SMS, MMS and WAP (and voice..). Your ad agency won't like to develop them because these are not candidates to win awards. They want cool sexy apps they can show off on their iPhone. An SMS, that is so crude it would work on a ten-year old phone for godsake, where't the fun in that? The developers will hate them because these are so 'limited'. The designers will hate the lack of any modern features and sexy bits. But SMS, MMS and WAP work and are (near-)universal. And are so simple your grandparents can use them. But no, they are not sexy at all. Just that they work and they make money and they reach the mass markets in every country. Here is where 250 Billion dollars resides. iPhone apps delivered less than one billion. Do I get through to you?

SMS is used actively by 3.6 billion people and reaches the phones of 4.6 mobile phone subscribers on the planet. WAP can be used to reach 3.7 Billion phones and has an active user base of 1.3 Billion people. MMS reaches 3.1 Billion phones and has an active user base of 1.7 Billion people worldwide. These compare with 1.2 Billion total personal computers in use globally, or 1.6 Billion TV sets. (or 600 million total installed base of all brands of smartphones - which includes second hand smartphones like in Africa)

Yes, SMS, MMS and WAP are not sexy, but they make money today. You can deliver almost every major customer-service experience on mobile via SMS, from bank alerts, to mobile coupons to voting on TV shows like Big Brother and American Idol. MMS is supremely versatile, can deliver headline news services like all major Chinese newspapers do - as paid premium news alert services, sending headline news and news pictures like a small pocket-sized newspaper front page. MMS news - paid news headlines - are so big that the branded paper newspapers in China all have them, and 41% of the newspaper audience is now paying for these MMS news headline services. HERE is your real eldorado.

MMS is used for example by TV shows - soap operas sell 5 minute previews of tomorrow's episode today, right after today's episode has ended - for die-hard soap opera fans who can't wait until tomorrow. WAP is the most versatile platform of them all, and can do fully interactive web-like experiences. Most people who use Google search on their phone worldwide - in India 40% of mobile phone owners have used Google search (as the legacy PC based internet is so tiny by installed base of PCs obviously) - have done it using WAP. If you ask them 'have you used WAP' they would say no. But if you ask them 'have you used Google search' on their phone - they will say yes. And they don't have smartphones. WAP is designed for small screen mobile use. Design on it presents its own problems and issues, obviously. "Real internet' developers hate WAP for being so restrictive, but well designed WAP services can deliver great customer satisfaction, loyalty, heavy usage, revenues, profits - and win global mobile service innovator awards - like Flirtomatic did last year all over the globe.

SMS, MMS and WAP (and voice) - four very simple, basic platforms. But they reach most phones on the planet and services on them have to be easy and simple to use - meaning even your grandparents can use them. That is what we need on mobile. Not location-based services. Not app store apps. But good solid mobile services. If you develop on SMS, MMS and WAP, you can find real gold. Billions of dollars worth of it already today. The next Googles, eBays, Amazons; and the next Bill Gates's and Steve Ballmers and Steve Jobses will come out of companies that deploy global mobile solutions on SMS, MMS, WAP and voice, not those who develop LBS services or app store apps. Just like today, when Carlos Slim was announced to have become the world's richest person. His company, America Movil, does basic voice and SMS for 95% of their inome on mobile. Not apps, not location-based services.

Guys, am I a crazy guy? I have written nine books on mobile services and apps. Bestselling books including the fastest-selling telecoms book of all time. My books and theories are referenced in 70 books published by other authors. I lecture at Oxford University on the mobile services and apps opportunity. I've been invited to speak at 250 conferences in 50 countries, including time and again and again in the leading countries where the most innovative services and apps are made - in Japan, in South Korea, in the Scandinavian countries etc (And in North America all the time as well). If my peers trust me, maybe you should consider the value of this blog. I am not saying that there is 'no money' in mobile. I am trying to steer you away from the fool's gold, and into the real opportunities. While they are not as sexy, the real opportunity is in SMS, in MMS, in WAP and basic mobile browser-based services - and especially in the Emerging World countries where literacy is a big issue, there is still billions to be made in basic voice related services. Please give your team and project and company and brand the chance to succeed in the real gold rush. Don't go for the fool's gold. (and fire any 'experts' who are suggesting those paths for you)

Wanna read a positive roadmap to your future where the money is? Go real Digital Klondyke, the Cyber Eldorado.

Comments

[Chris Grayson]

Wow Tomi, it is rare that I disagree with you about anything.

MP3 players were largely a failure until the iPod (for that matter, the cassette tape was a flop, until Sony introduced the Walkman). Technologies take time to mature. Longer than entrepreneurs and technologists have patients for, even in our fast moving technological world.

My experience has been -- Ask people why they don't use location based services and the response is pretty universal: "Thought it was awesome until I used it and learned how inaccurate they were. It would be great if it was actually accurate. Wake me up when they solve that accuracy problem."

Now, I do believe there needs to be something more than just location, but a "location based service" is just that: location plus a service. How are Navigon, TomTom, Garmin, et al doing? (personally I think that general purpose devices like the iPhone and the Android are going to eat their lunch, or at least destroy the business model for their proprietary hardware platforms).

The point is, if you have a lame service and/or inaccurate location tracking, then it leads to a poor user experience. Raise the accuracy of the location (assisted GPS, cell-tower triangulation, cross-coordination with Galileo, GLONASS, etc.), and make the "service" part something worthwhile (augmented reality, social networking, gameplay, combination of the three, etc.), and you have a killer app for location based services. These thing will be a success.

Maybe our difference is one of semantics.

cheers,
Chris

[James Barnes]

You are not crazy.

Very few of the app stores support any app-as-service business models (where the customer pays metered or event charges for a service provisioned by an app). It's all one-time store payment only.

Blinkered like draught horse.

[Rick Joubert]

Tomi, as you know we speak the same language when it comes to the basic business opportunity - at least on a 3-5 year view - for mobile web/VAS services.
You would not believe it but even in Africa I have to aggressively evangelise the need to focus on WAP, SMS, USSD and Voice as the only channels with real commercial relevance for the foreseeable future.
I spoke at a conference in Nairobi a few weeks ago and led with this message and I must say there were a lot of entrepreneurs in the room who did not like hearing it...the application mindset and the promise of the converged "smartphone" has even got Africans chasing that "fools gold".
I blogged about the Nairobi conference here: http://www.rickjoubert.com/?p=106
Great post Tomi.

Cheers,
Rick

[Murat]

Your view on the App Store is too narrow, not everything on there needs to raise revenue by being purchased or directly through the app. Lots of apps are to raise brand awareness or promote campaigns, some such as the O2 My Account app save money for the company by reducing the weight on call centres. Another App for Barclaycard which was a game, got millions of downloads. Again, not revenue generating but different objectives.

It's almost like expecting every single brand website to make money. Thousands of apps, hundreds of different objectives. Not every SMS/MMS/Wap site makes brands money, and I can tell you that the costs those are sometimes way more expensive than a app.

Plus, there are many template and 'cookie cutter' iPhone app makers which can publish to the store for less than $300.

The App Store has helped mobile and mobile marketing grow, often you'll find that getting approached to make an iPhone app allows you to do SMS and WAP executions for a brand too.

"or very clever and innovative to the degree of patentable creativity effort"

That should be THE STANDARD for everyone, do you think that people deserve success with anything less? There seems to be a sense of entiltlment. If you make a crap campaign via SMS, MMS, iPhone or whatever, it doesn't make a difference where you put it, it'll still be crap.

Bedroom developers have made millions, is this because they are 'lucky' or that they had a good idea that caught on?

And what else happens once this news breaks out? More developers are attracted to iPhone and you get even more apps. You can't blame them, if you've ever tried to develop for Symbian/J2ME you'll see the difference.

You also haven't factored in the needs of the client, you are touting SMS and MMS, but when a client says they want something visually engaging, in 3D that ties into their ABL and sends status updates to Twitter, and has a Share function and pull dynamic data in and, and... Do you say, ah you don't need an app, you need SMS/WAP. No you don't. You need to go into a few agencies and sit there and look at briefs all day.

Also subcriber data is an issue, not every brand has a beautfiul list of customers that want whatever the campaign has to offer.

"Your ad agency won't like to develop them because these are not candidates to win awards"

SMS, MMS and WAP campaign DO win awards all the time, and will still win awards in the future. I Personally love these the most because of the sheer creativity some agencies have with mechanics (Terminate-a-mate, Nike ID MMS etc)It's just that not everyone is creative enough to think of award winners everytime or the brief doesn't allow for it.

So what you are assuming that if a brand uses SMS, no matter what their objectives, they will make revenue? Dude isn't the case, back to objectives/propositions. Everyone has different ones.

Developing countries, yes the opportunity is the basic services but come on that's not a secret given the type of handsets. So including developing countries in a post about iPhone apps doesn't make sense unless you are marketing to those countries.

My advice is, make sure the proposition is right and fits your audience. Use your demographic information, handset data and whatever else you have to make something that fits the brief and will get those consumer engaging. Whether that means using MMS, SMS, Bluetooth, iPhone, WAP, Webkit, whatever.

You're also talking about Location based services in a weird way, like if an app features location, it becomes its definition. Location is a feature of an app plain and simple, it doesn't become its only purpose for existing. (Unless the service is like Placecast) Like the ATM finder you mention, the purpose of that app isn't to generate revenue for the LBS segment is it? It's a feature. What do you expect apps like that to do?

[Tomi T Ahonen]

Hi Chris, James and Rick

Thank you for the comments. Will respond to each individually.

Chris - good points and I have heard them for 11 years already. The point you may have missed in the above - was that EZ-Navi was fully GPS-enabled 9 years ago. This in Tokyo - the massively congested city where the buildings are not in numerical order on any street. I am not kidding. In Tokyo on any given street, the numbers are in no logical sequence whatsoever. So taxi drivers get to the right street, and then just cruise from one end to the other, looking for the right number of the building. Or go by landmarks where given (we're opposite the Pizza Hut etc) and obviously now with LBS. But EZ-Navi had GPS from 2001 and still even in Tokyo they have dismally bad market success. The literally world's most amazing navigation service, with pin-point accuracy, yet no market success. This is what I mean. No matter how elegant your argument, Chris, the EVIDENCE suggests that this will never happen. Never. Except for some niche apps like parcel tracking, vehicle tracking and yes, for some drivers (And only some of the time) the navigation aides..

James - thanks, haha.. we agree

Rick - hey, cool, thanks. Yes, I hear you, I have similar experiences all over the world where the given technologist enthusiast manager has read recent tech press and fallen in love with his iPhone (or Android or Symbian or whatever smartphone) and thinks that apps is the way to go. In America it will first be a mass market - because both of high smartphone adoption (while lagging Europe on that) but also because of a large established PC apps market place. And the world's biggest stand-alone PDA market (Arguably the iPhone Touch is a modern PDA). But even there the total smartphone installed base is less than a quarter of all phones today haha, and most of those are Blackberries (business apps, not consumer App store Apps). So yeah, we have a long way to go. ANd in the Emerging World economies, the smartphone market won't be mass market until right near the end of the decade - when we count the installed base to include lots of second-hand (usually Nokia) phones haha..

Great blog about the Nairobi conference. Wish I coulda been with you there Rick. Give my best to all our friends in South Africa!

Thank you all for writing

Tomi Ahonen :-)

[Alexander Gödde]

I don't really follow the argument about location-based services not ever being successful. On my Nokia mobile I use the navigation feature all the time. Similarly for the search - next restaurant, subway station etc.. If still were a student I would love something like Latitude that lets me see where all my student mates hang out. Or gig finder or similar services that let me discover events close to my location.
All of these, and many other services, are successful and will become ubiquitous in the future. Location is an important part of the context awareness that mobile can provide.
The companies that develop these services and run them will make money. By that I mean the people who do the programming, run the servers, aggregate the data to be used etc. In most cases the money will not come from the end consumer, but from providers who offer these services as part of a bigger business strategy (e.g. Nokia to drive handset sales, google to tie users into the google apps/advertising universe). I agree that this is not at the moment a very big market money-wise, and I do not see it develop into anything that much bigger. But location-based services are not a failure by any means just because they cannot be monetized on their own in the vast majority of cases.

[Martin Lawrence]

Hi Tomi,

I really enjoyed that post. Very thought provoking. However, I strongly disagree.

The mistake you make is that you contrast cost of development with profit on apps. Not value. And as Murat has stated, a major aspect of location based apps is creating (intangible) value. As in: connecting customers to brands. As in: connecting consumers to (local) businesses.

As you know, all business is local. The majority of household income is spent locally, i.e. withing some 20 miles of our homes. Greg Sterling estimates the local SMB ad spend in the US alone to be at 50 billion US$. I believe that, digitally, this is largely untapped potential. These spendings will shift from traditional marketing to digital in the coming years.

I have been designing digital marketing solutions for local SMBs for the past five years. And I assure you that existing marketing tools - SMS, MMS, WAP - do not start address the marketing needs of local SMBs.

I would argue that a mobile device is the best device to support a digital consumer relationship between local SMB and their customers. And that, today, we do not know what that solution will look like.

Regards, Martin

[Sami]

Tomi,

Thanks for another lengthy post ;) Just want to touch on a couple of points here:

First, LBS. Agreed. In fact, I don't think there are location-_based_-services as such at all. Nothing beyond a "where am I?"-service anyway. But there are plenty of location-enhanced-services. A crucial test for any "LBS"-service that one is thinking about launching is to ask whether it could be successful without the location information. If it could, then location might bring some genuine added value. But if location is _all_ you have, it's more likely than not to be doomed.

Second, SMS/MMS/WAP etc. You're right in that there's a boatload of money to be made in that space. But for a developer, especially for a small developer that most of them are, there's a major bootstrapping problem or two. First, how to get network access to do the messaging? For SMS there are global providers like Clickatell, but it's far more complicated with MMS, WAP etc. That's when you need to deal with operators and frankly, as I'm sure you know, dealing with operators is rather painful. Then there's the bootstrapping problem of getting customers - how are they going to find out about your service? By sending an unsolicited SMS? Illegal in most places.

On the other hand, if you write an app, you submit it to the app store and you have instant global distribution. Try that with MMS. Sure the potential audience is a fraction of MMS, but so is the pain you have to deal with.

Finally, there's the question that always arises from these "here's-how-you-can-make-lots-of-money"-type of posts; how come you haven't done it? Where is your billion-dollar SMS-business - or is it a secret? ;)

[Tomi T Ahonen]

Hi Murat, Alexandre, Lawrence and Sami

Thanks for the comments. Will respond to each individually

Murat - first on 'app store view too narrow' that everything need not make money. Fine. We agree on this. But then the point - if any company's or brand's need is to raise awareness or do any type of marketing, then an app is totally stupid if a similar experience can be delivered on SMS, or MMS or WAP or Voice or even basic 'real internet' HTML web page. If the same brand experience can be delivered on any of those 5 methods, to do an app for the 1% or 3% or even 5% of the total audience is idiotic from a brand owner point of view.

Take your examples - 02 My Account to save money that callers don't call the calling center. Good idea. Bad platform. You can do all of it - all of it - via WAP. That is the best platform. Most of it you can do via SMS, a far better platform than an app. Reaches every user, and every user can use it instantly without any apps to download and install. Works on every phone (in UK, WAP would reach 100%). Barclaycard game? I don't know what kind of game it was, some games are indeed optimal for app download not as web service but other games - especially multiplayer games - usually the more appealing ones - work better as community games on the web (or WAP). But if you do a Barclaycard game, and WAP/MMS/SMS is not suitable, I would guess most such games would have worked as Java games - now you reach over two thirds of UK consumers.

But as to truly award-winning popular and innovative games on SMS, MMS and WAP, go take a look at my blog about mobile ads from today. I'm sorry I don't know what the Barclay card game was, I doubt it was as awesome as the NWA game or the Puma game I mention for example.

You make a good point that App Stores have allowed mobile ad visibility to grow, and then clients have also often accepted SMS and WAP executions. I would say that was 80% the iPhone and 20% the 'app' - the sexy part was that the ad executives on Madison Avenue in New York City and the big global brand managers now all have iPhones - that was the big catalyst, and apps the smaller kicker, but makes no difference, yes its been good for excitement. The Concorde was good for air travel excitement but we all travel at half that speed in Boeings and Airbusses, and the Concorde has been withdrawn as commercially unviable. The analogy is strong, most who have developed apps - have also had hopes to recoup their investments - and most will be disappointed. the App environment is not conducive (today) for making money.

Murat then on your expectation - that the 'patentable' innovation is what should be expected. No, that is totally unreasonable. There is no way we get 150,000 patentable unique honestly innovative ideas in one year out of a smartphone platform. Most of those are - as you mention yourself - cookie-cutter concepts. It is certainly commendable for 'expensive' and 'talented' and 'award-winning' top digital agencies to set as a goal, to develop some actually patentable ideas per year - but no way every iPhone app can hope to be that. Totally unreasonable, Murat. Are you aware of the patenting process? Have you ever been granted a patent? Have you ever applied for a patent?

Visually engaging? As if award-winning stunning visually engaging campaigns are not possible on mobile using MMS and WAP? Take my examples of BMW winter tyres (MMS) or the Flirtomatic (WAP) examples. Massively successful, engaging and visually stunning. Plus got of course the metrics and measurements - but far more engagement than typical iPhone app.

You say not every client has a beautiful list of their customers? And therefore? What? We dont' start to collect it now - with SMS and MMS and WAP, we rather forget about it and do an app? Thats just dumb. Every brand, every company, every entity needs to find its fans and supporters and engage with them on mobile and seek their permission - NOW. And thats via SMS, primarily and MMS. Standard marketing work. STANDARD marketing work. Legwork. Needs to be done by every brand. Its not like you look at them and say, oh, in that case the solution is an iPhone app? No, if they are behind, they need to rush now and start. Getting those permissions and that phone number database. Hello?

I never said that if a brand uses SMS it is guaranteed to make money. I said that it is far easier to make money in SMS and MMS than in apps today. Don't put words in my mouth.

You say Murat that it is not relevant to discuss apps in the Emerging Markets. Clearly you do not live or work in those markets (I do consulting work in Emerging Market countries on a monthly and often weekly basis). It is a valid concern, they are very confused about this and ad agencies and brands regularly now talk about apps. My blog is necessary for them as well.

But we do agree that you should use a platform that is appropriate for the need and the client (advertiser, brand etc) and the end-user. And as to location-based services? I make a clear point in the blog that I think location is valid as an element of a service, but for most consumer oriented mass market services, the alternate benefit of a given service outweighs any benefit from the location. like with a game, or a social networking site or augmented reality etc. Maybe you should re-read that part.

Alexander - I am not talking about a functionality that is given for free and we find some usage (like on some smartphones now that have GPS for example and then Nokia offers free guidance, maps etc). I did mean specifically those companies that intend to make money on location-based services. There are tons of them and hundreds more coming from Silicon valley now, each with an ever more outrageous idea to monetize location. I could not have asked for better evidence, today Vodafone announced in UK they terminate their (paid) location-based service they recently bought, as it is clearly never going to make money. This will be the trend, mark my words.

Martin - interesting point and we kind of agree. But consider this - is the value to me, that I am a client of a given hairdresser or shoe store or news stand, or is the value that I am close to one. Why does my regular hair dresser, shoe store and news stand NOT get my permission and market to me directly, and know they talk to their loyal client - rather than bombard those who pass them by. I may live in the other side of town - totally beyond location - but because of my job or school or girl friend or family I happen to shop at that shop. Location is unnecessary exclusion of customers while bombarding un-interested customers. If we go through the trouble of seeking persmission (as we should in all marketing on mobile) then location becomes instantly irrelevant. Do you mean to say, you will NOT want to tell me of your offer today, if I happen to be currently in the other side of town? Your offer today could prompt me to visit your store - where I might otherwise gone an alternate route. Its totally dumb to limit ads to location. There is never a better advantage compared to permission-based/opt-in.

Yes, most business is near us, yes we frequent nearby stores - but mobile allows us so much more in truly personal needs, truly time-relevant needs, truly social content relevant needs (my friends, etc). Any of these can be deployed EXCLUDING the location. So what, if I am suddenly ill and at home. Why NOT send me the scheduled ad, by permission - even though I am not anywhere near your store. I might send my brother to stop by at your store to get it for me. Location based ads is an excluding model, which limits your reach. And very stupidly so, when we have far more powerful abilities on our phone.

You make quite a blanket statement - SMS, MMS and WAP do not address needs of SMB type of companies. I have literally over 4,000 examples from over 70 countries to prove you wrong. I am not about to go one-by-one, your statement is too outrageous. I believe one need SMB's that do service, is to communicate to clients when a limited supply service (like lock repair or hairdresser appointment or dentist appointment or car scheduled maintenance) is available. This is perfectly suited for SMS, why would you deploy it on anything else? I hae thousands of such examples. You better explain yourself before I bother with more. What SMB universal needs are there that SMS, MMS and WAP cannot address (but would be well addressed with Location-based services or smartphone apps).

Sami - hi, welcome back. Yeah, we agree on locaiton-based services.

On the small business point-of-view. Good point. This is where a truly small business can do their CRM stuff on SMS, slightly bigger SME's (of the kind that have professionally maintained web pages) would be fine with WAP and MMS, and only larger SME's should bother with bulk SMS and premium SMS solutions. But lets go back in time - we discuss here at this blog for example how BulkSMS the South African SMS provider got started - it was a couple of surfer dudes, who first just sent automated SMS alerts of wind speeds to friends who were into windsurfing. It can well start from something that small. You know the Lahti dentist office - that was one dentist initially, doing a basic PC-to-mobile 'bulk' SMS mailing to only dozens of their clients per cancelled appointment. You can do this very modestly on mobile. We don't have to build something enormous here, if the business is small. Agustin Calvo's book is perfect in dealing only with small 'mom and pop' size very tiny SME's and how they can do (mostly just basic SMS) based mobile marketing.

But Sami, the last point - that was uncalled for - how do you make money? Sami, honestly, you've been here many times, you've read this blog for years. Have I not been honest, diligent and prolific in catalogueing the successes in mobile, especially around SMS? The first premium content earned on SMS (ringing tone) I was literally the world's first person to talk about it at a conference, to explain how they make money. Then I have returned and charted the growth of that bonanza to a 6.5 Billion dollar industry, and yes, continuously naming names and companies, from Saunalahti to Crazy Frog. Sami thats not fair. One SMS concept after another. SMS-to-TV, I was literally the world's first to discuss that and explain its model, and then catalog over 100 SMS-to-TV services from Finland to Malaysia. including the companies who make the money and the total size of the industry and its relevance from MTV's Videoclash to American Idol. Same for airline check in - I was the world's first person to discuss Finnair's mobile check in at a conference and to write about it and have been charting its adoption and the copycats up to earlier today when I mentioned on Twitter that United has joined the US based airlines now offering this service.

Sami you suggested that I am somehow duping people by talking of something that is not real. You KNOW better. You KNOW there is no other free source, no website, no blog, no wiki, no chat board, with more SMS-oriented business that is explained - and revisited and revisited with numbers as far as they are willing to reveal. That was not fair, Sami. I am totally open on this blog and am just trying to help our readers find the gold in this industry. You know this Sami.

Thank you all for writing. Please come back, lets discuss some more...

Tomi Ahonen :-)

[Sami]

Tomi, you're right in that the money comment was a bit unfair, but it was also a bit tongue-in-cheek, hope you can appreciate that. And yes, I know all the things you said I know :) Apologies if I offended, I didn't mean to suggest you were duping anyone - I just pointed that it's weird how consultants from all walks of life - yes, yes, I myself am fully guilty of this also - tell you how to make money but still stick to consulting.

Makes me think the best consultants should take some time away from consulting and start a business. You know, just as a proof-of-concept ;) Walk the talk, eat our own dogfood, whatever you want to call it.

What I'm saying has nothing to do with disputing how big a business SMS is. But comparing, say, the entire SMS business to the business of apps or iTunes app store just isn't fair either; the SMS ecosystem is so fragmented it's beyond imagination. The total opportunity for building an app to the Apple App Store might be a thousand times less than "SMS" is - but so is the effort to target it.

Another thing we need is more discussion around this. Because if there is a single developer looking to make a buck or two on mobile services, he or she won't even THINK - not for a second - that SMS or MMS are good for anything. Because all everyone is talking about are app stores.

[Bert Van Wassenhove]

Hi Tomi,

Interesting view, but I think you miss out on an essential part. Especially the app store is a perfect example of "downstream innovation". The way services (or products for that matter) are brought to market is just as important as the service itself. So location bases as such is nothing, but wrapped in a cool app it might work, especially if you deliver it through an app store that has almost no barrier to entry.

[Michael]

Hello,

I agree with most of what you write, but you overshot your target somewhat by claiming that EZ-Navi isn't a success at all. Well, you should've researched this particular case a little bit better, before making your bold claims. EZ-Navi is a service made for KDDI by a company called Navitime and it is very successful. The last unofficial numbers I heard are about 1,5 years old and there were about 3 Million paying subscribers for their service (Japan only). It has grown since. If you check on Navitime you'll find out that the service is offered on all Japanese mobile phone networks, it was even the standard navigation for Docomo for a while. In the branded cases the subscriptions are usually paid for by the networks.
Navitime is advertising on all Tokyo trains, on TV, web, everywhere in Japan and it's paying off for them. Almost everyone in cities like Tokyo and Osaka uses their service or that of their relatively new competitor Zenrin (now the standard issues for some if not all Docomo phones).
Now why isn't this service being taken out into the world? I can tell you, it already would've been spread worldwide if it wasn't for the insular mentality that many Japanese companies tend to display.
But what will happen to this navigation market on mobile phones? As you can see Google and also Nokia have already moved into this space, basically starting to recreate what Navitime has developed many years ago. In their case navigation is being used to drive handset sales and not generate revenue through subscriptions, but it is still becoming mass market and is already taking market share away from companies like TomTom as was pointed out before. Who knows, maybe the owners of Navitime finally see some sense and open up their company policies or even sell their company (something they could've done many times by now)?.
If this doesn't happen, then Navitime will most probably loose, but the service of mobile pedestrian navigation will be a huge success in all cities world-wide, probably produced by Google and/or Nokia. And-mark my words-a service similar to Navitime will be on Android handsets very soon and will be a major factor in driving the sales of these handsets...

[David Doherty]

Thanks for the brilliant post and discussion. Have sent it to a dozen clients who are being brainwashed by the fools gold.

Next time I'm in a meeting and they inevitably start on about the urgent need for an iPhone app I'm going to have to try very hard not to give this lesson. Big shame as it would be so funny to hear someone in a country accent reminding them of the online analogy "my pa, he went and bought some fool's gold..."

Sami - very disappointed in you for that stupid dig, you know what this man is all about.

[Martin Lawrence]

Hi Tomi,

I think we actually agree on most points. The real gold in mobile - or at least a serious amount of it - lies in digitally connecting people to local business (C2B - consumer to business).

Mind you, though I have done some work with Apps, I am far more interested in approaches like facebook zero - which cleverly leverage SMS and WAP. So I did not mean to make a blanket statement on SMS, MMS and WAP. WAP, SMS and MMS are critical elements that help connect SMB with their customers.

Location sensors are another element, and current location has a catalytic role in establishing the initial connection between consumers and local businesses. I would argue that most mobile subscribers will have their first experience of explicitely establishing a connection to a local business - be it a restaurant, ATM or plumber - by searching it on their phone and saving it to their address book.

Thus, I believe that Local Search will serve as one of the main entrypoints for establishing C2B-connections. And that building digital connections betweeen consumers and businesses is, will and should be driven AND controlled by the consumer.

To illustrate the point about control: I believe we will see the establishment of an C2B-adressbook, containing all my shops and service providers. That includes a simple checkbox for each business, stating if and when that business may send me offers and coupons.

I hope I have made my views clearer.

[Tomi T Ahonen]

Hi Sami, Bert, Michael, David, Martin

Hey, cool continued discussion. Thank you all for the comments (and many coming back..)

Sami - thats ok, thanks and yes tongue-in-cheek is fine haha. As to me - I serve on boards of some start-ups yes, I did my decade of real mobile/telecoms work in the industry - few other consultants can claim a world record in market share, to deploy the world's largest integrated IT solution across independent companies, to create something genuinely world's first (I deployed world's first fixed-mobile solution) and to have chaired a standardizing committee when they set the world's first version of a standard (again in fixed mobile space obviously). I think I've done my bit to prove I'm not just a consultant haha and have the 'street cred' to preach about what I have once practised.

As to the daily grind of a telco or any other corporation - no thanks. I love my job, I am much rather doing this, occasionally free consulting advice here on the blog, my Twitter commentary, and releasing about one book per year to keep up the more serious contributions to the industry. And then have a james bond lifestyle to visit with my customers to talk about these things.

I'm happy so many of our readers are then able to make money on mobile haha, based on my writings and the blog. But yeah, I know many of those who offer consulting have never actually 'done it' in mobile telecoms. I have had my time in it haha, both on the operator side and the equipment vendor side. Plus before that I did several years on the internet side of the industry. I'm satisfied that my competence stems from doing it, not just talking about it haha.

As to the developer and their interests right now. Yes, we totally agree. It is not necessarily true that for every need, the solution should be or optimally would be SMS, MMS and WAP (or 'real web on mobile' or voice or Java) based but today, the app space is massively over-crowded, the opportunities to do anything successful in it are tiny and the market itself is too immature - the best app store platform Apple's App Store reaching under 1% of the planet's phones - that is a truth which must be heard more. I would hate it, if some clever person puts his or her innovation and idea into a doomed proposition, when a similar technology exists where success would be relatively easy.

Bert - very good point and yes, I have written elsewhere on several times that apps are a good development for the mobile industry and we should optimized per need, customer type, benefit intended, etc. Aops can be great. But today they are far FAR too much overhyped and the market space is sucking all the investment where very valid and FAR more likely to succeed opportunities then get 'crowded out' - like SMS, MMS and WAP vs an app. Like the UK health department or the Consevative and Labour parties all doing an iPhone app when they should have put that effort into reaching their voters or patients through WAP and get into every pocket in the UK. Dumb!

As to location - well, I once believed passionatey like you. And I wrote a whole chapter in my first book about the wonderful future of location. I have grown up a lot since then. Maybe my view should give you reason to pause, to re-consider. Perhaps this old dog has a lesson for you. The money is not in LBS, whether you do it via a service or app. The money is simply not there. Don't kid yourself.

Michael - I am fully aware of EZ-Navi which is why I mentioned it. It is technically supreme but as a commercial proposition has underperformed its own projections and all industyr expectations for a decade. It has only a tiny fraction of Japanese consumers as active users, after a decade. When almost every other Japanese mobile industry innovation has jumped FAR past them in adoption and market success, from 2D Barcodes to 1Seg digital TV to FeliCa. I did not say EZ-Navi or location-based services 'cannot make money' - please read carefully what I wrote - I said LBS is a poorly performming opportunity. It has grown - but has exhibited second worst growth of the past decade, compared to any other of dozens upon dozens of mobile service categories.

David - haha, thanks for stopping by and thanks for enjoying my little comedy there, the kid talking about his pa and losing his short in pursuing fool's gold. I did laugh myself when I wrote that.. And thanks for sticking up for me re Sami, but you know you've seen Sami here before, we're totally cool, don't worry about it.

Martin - yeah, that makes sense. And yes, I am totally open to observing and witnessing how consumers change behavior. Just like cameraphones - we used them first to snap pictures of important 'photograph' like situations, but today many use the cameraphone as a memory aid - like I do regularly snapping a picture of the latest exchange rate tables from the newspaper on the airplane - I don't have time to try to memorize every exchange rate and don't bother 'preparing' for it before I leave home (and don't want to waste my roaming charges or my time in the other country to do that on the mobile web). But on the plane I read the Wall Street Journal or Financial Times or whatever paper, and do an update taking the picture of the exchange rates. And I delete last week's 'picture'. This is never intended to be 'saved' or printed or shown ot anyone. Its just a memory tool for me.

And now I do it for example for all bookings. I take a cameraphone picture of my hotel, my airline, my seating booking, etc. Then if I need it at the airport or hotel, I don't need to dig for my laptop (which in worst case has run out of battery) but just take out my phone and will have my confirmation booking number, etc. Again, using the cameraphone as a memory aid. Others use it to take pictures of where they parked their car, or a picture of the local subway system map, or whatever. This is a 'new way' of behaving with the cameraphone.

Similarly we will eventually learn that our phone has the LBS ability, and we'll adjust to it, and of course there will be services that will be built around it. A perfect example is Layar the Augmented Reality browser. But these are not currently mass market successes, and in most cases the same 'utility' can be done without location.

Take your exmaple - the store. If I want to sign up to say the neighborhood store that sells wines and alcohol, to get the occasional ad and offer and coupon from them - we can do this via a 2D Barcode in the store - no LBS necessary, thus no paymnet to networks, and no need for GPS, and it works inside the store (shopping mall etc). And the 2D Barcode could be on a poster inside the store or at their store window - and thus get an 'opt in' into their customer base, not spam LBS...

See? We can far more easily, less obtrusively, do the same solution at a far more user-friendly way, with technologies that reach a far wider audience. If you don't like 2D Barcodes, we could do it via SMS as well obviously....

Thank you all for writing

Tomi Ahonen :-)

[Shawn]

First, I don't buy the argument that something is unsuccessful if it has been around for twelve years without generating a lot of money.

Long before Facebook, there was sixdegrees.com, then Friendster. Does that mean Mark Zuckerberg was dabbling in futility? Before Google, there was AltaVista and LookSmart and Excite.com. Before YouTube, there was heavy.com and Atom Films. Sometimes things fail because the right set of factors has not coalesced. Todays phones have orders of magnitude better displays, input mechanisms, processing power and bandwidth than those of twelve years ago. Who cares what location-based services existed twelve years ago?

And I don't know how you can so offhandedly dismiss AdMob's statistic that says the iPhone is responsible for 50% of mobile data traffic. 0.5% market share is obviously not the whole story here. AdMob's stats are "nonsense" based on what exactly?

Apps are folly. I'll give you that. But it's the web that's the future, not SMS. SMS has been a reliable money-maker, but you are the mobile industry's equivalent of a flat-earther if you think SMS based services will continue to have good prospects.

[Martin Lawrence]

Tomi - brilliant and you're dead-on.

My confusion: LBS and Local Search overlap. So you could see it as 'any Google mobile search with Local intent is LBS'. Example: I search for a doctor who practices in the neighborhood I live in. Now I'm at work. My Google mobile search could be a) current GPS b) my hometown. Is b) not LBS?

Anyway: Lets just say the term 'Local Search' will prevail over 'LBS'.

Really liked the part about the barcode scan being the opt-in. Yeah. It is interesting to watch facebook: first do business fanpages (growing like a weed), then enable businesses to print QR codes. Am I wrong, or are they going into check-ins fullforce? Make it a utility function developers can include.

Business page & checkins & some function for messaging my customers? Could monetize nicely.

Now Facebook is a social utility. Checkins to Social Location are social communications. If they do this right, they will be own a large part of checkins to social locations.

So I think could Nokia. They're getting very focussed. Matter of execution.

Google? Not much luck with innovations lately. Weird QR-code campaign, didn't seem to have caught on. They could drive it on Android - but that's not exactly the world.

[Murat]

If the same experience can be delivered using SMS, MMS, WAP etc then yeah sure, include those in the campaign.

The O2 example - you missed the point, I wasn't saying that it couldn't work on other channels. My point was that not every app needs to make revenue.

The Barclaycard game - again you missed the point, was talking about revenue again. If you didn't know yhe game was 3D, tied into the ABL campaign and got 10 million downloads. It wouldn't have worked on Java. Why? It used the accerometer to move the player, which is supported by a lot less than two thirds of consumer handsets as Java doesn't have access to it.

You just dismissed the Barclaycard game out of hand without even seeing it, I wasn't even making the point of one being better than the other either it was about not every app needing to make revenue.

"The analogy is strong, most who have developed apps - have also had hopes to recoup their investments - and most will be disappointed. the App environment is not conducive (today) for making money."

Who are you talking about here? Small app developers trying to make some money with their own little startup ideas or actual brands? Again, not everything in the app store is there to make money HOWEVER, those who have the right model and propositon have been very successful. Ebay is one example, Pizza Hut is another. Those who have got it right have done well and those who have got it wrong haven't, but isn't that the same with everything? Just because someone spends time and money making an app doesn't mean the should expect it to be successful for that reason alone.

I wasn't talking about the patenable part, I was talking about being very clever and innovative. I doubt many brands or agencies have the goal of patenting stuff when making apps.

Yes I'm aware of the patenting process, yes I've applied for patents at Nokia.

I didn't say award winning campaigns weren't possible using MMS and WAP (I've worked on campaigns using both that have won awards) but saying that they are more engaging than iPhone Apps is ridiculous.

Visually stunning MMS? At the end of the day you're talking about JPEG slideshows, 256 colour animated GIFs or a 8 sec highly compressed video...on a multitude of screen sizes. Maybe I have a different standard of 'stunning'

I've made hundreds of MMS ad campaigns but I've yet to see one that can compare to the engagement of iPhone/Android applications (and I can do stuff with MMS SMIL that you wouldn't believe). WAP? Yeah it might be engaging for some, but you can't guarentee the same experience for everyone so...then what?

But at the end of the day if all these things could be as engaging as Apps then....we wouldn't be having this conversation would we?

"it is far easier to make money in SMS and MMS than in apps today"
......seriously? Then you would assume I would have created MMS campaigns for hundreds of brands, retailers etc every week from 2006-2009 when in fact, it was just operators sending MMS briefs over. If it was easy then everyone would be doing it. The reason why they aren't is definitely not because their minds are being clouded by the iPhone.

Also I think your comment form has problems with Chrome, I get the message "We're sorry, we cannot accept this data"

[klas]

if i have a lunch meeting with some business contact and am unfamiliar with the area, it would be great if i could easily from my phone calender open a mapview that would track him/her down (should they allow me to), or if i am in an unfamiliar area looking for something, a charger to my phone for example, if i quickly and easy could see where they are sold i'd see value. If i was in a meeting, suddenly getting an alert from my phone calender that my meeting i had downtown 1 1/2 hours later might be in risk as there is heavy traffic between me and the meeting (this based on data from actual users having gps enabled handsets in cars / car enabled connected gps's) and maybe i even could get an alternative route (where same users data show that traffic flows normally) or just me crawing for a cold beer, see whom i know nearby to join me. Also with Nokia's terminal mode invention the mobile phone (gps enabled) will be connected to the car infotainment system providing a bigger display in car but using mobile phones maps solution and gps.

Augmented reality, me standing somewhere looking at a ruin through my phone camera lens, by GPS and compass and internet access, data could be drawn on my display showing how that ruin looked like when it was inhabitated for example.

i do agree that LBS services in general hasn't historically proven to be cash cows, but i do believe it can add value to consumers in the future.

[ishika mahajan]

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Ishika Mahajan
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