Communities Dominate Brands

Mobile and Money: Dave Birch thoughts from Forum Oxford Conference

This is one of the blogs that has waited on my to-do list for a long while, but I had to get to it. And I think Alan Moore's new book No Straight Lines is a perfect opportunity to talk about mobile money. And on mobile money we should listen to the master on that topic, Dave Birch of Consult Hyperion, whose book Digital Identity Management is also a must-read. So yes, Dave spoke at the Forum Oxford Conference last year and I really wanted to post a blog about his thinking about mobile and money and perhaps a few other related things too.

WHEN EVERYBODY HATES EVERYBODY

First of all, Dave has been studying the digital money opportunity for many years and observed the evolution of the mobile money ecosystem. He said of the mobile money industry that "The mobile wallet market structure is basically that everybody hates everybody else." So in mobile this just like the mobile industry in general (of its usual mutual distrust that can degenerate into hatered and back-stabbing) but with far more global players. It includes the mobile network operators/carriers, who hate the handset makers, who hate the operating system providers, who hate the payments providers, who hate the plastic and contactless payments system providers, who hate the credit card providers, who hate the banks, who hate the retailers; and then all of whom then together hate each of the related regulators which now means banking regulators, telecoms regulators and consumer protection regulators (plus competition regulators ie anti-monopoly watchdogs).

Spot on Dave! This is a quagmire haha, and it seems to only take off, if either the market has a very strong player who can do it alone, like NTT DoCoMo in Japan or Safaricom/Vodafone in Kenya etc; or else if after years and years of collaboration, the industry players can come together like in South Korea.

So if you thought mobile money is 'obvious' and has such superb benefits it has to happen immediately, and now as more and more players from Nokia to Google to Visa to Vodafone to Coca Cola to Tesco to Paypal to many big banks are talking mobile money, don't think it will happen overnight. Remember, Turkey is the first country to issue a target date for the end of cash, and that year is 2025. So don't throw away your credit cards just yet haha..

EVERY PHONE CAN.. RECEIVE PAYMENTS

The Dave talked a lot about mobile in the money opportunity, with great insights. Dave said first of all, that "The point of mobile payment is not that your phone is your card, but that the phone is your terminal." Brilliant, absolutely true Dave! I've been saying this for a while too. Totally true, yes. The easy thing to notice, is that you can use your phone to make the payment, to replace the plastic card or banknote or coin, to pay for your parking or your Coca Cola at the vending machine or your train ticket. That is an evolutionary shift, from one electronic gadget in our pocket (the plastic card with the magnetic stripe and the security chip) to another (our mobile phone). But the radical shift is the other side, receiving payments. The average person cannot receive payments from a plastic card like a Visa card or Mastercard or a banking card. We have no way to verify that card is valid, and that it has a balance, and to deduct the paymnt from it. But any mobile phone can act as the receiving terminal for payments. We consumers can become 'merchants' in that way, to handle payments, and real merchants can upgrade to digital payments without the expensive credit card handling equipment. This is what is powering so much of the mobile retail in countries from the Philippines to the beaches in Brazil.

And that is something Dave talked about as 'Mobile Enhanced Retailing'. Its not that mobile will replace the retail shop - which it can do in some extreme cases like the internet did with music, books, travel etc. Sure in some extreme cases in retail, an m-commerce site can replace the retail store; but in most cases, the mobile is best suited to enhance our retail experience in anything from driving footfall to the stores, to adding to the experience within the store such as treasure hunts and getting more information about the goods, to speedier handling of the payments etc.

BETTER TO LOSE PHONE THAN WALLET

Then the usual problem most of us 'Luddites' have about mobile payments, is that we fear the single point of contact problem. That it would be dangerous to have our full wallet on our phone, and what if we lose our phone, or its stolen, or it is broken, or the battery runs out. Haha, yes, true, but the same problem is also with our plastic, what if your Visa card or American Express is lost, or stolen, or broken in an accident, or wears out so that it cannot be read anymore, etc. Dave made the very relevant point that we all in mobile money make almost daily - a payment solution is far more secure and far easier to recover from than any other payment mechanism. Yes its true. Dave said it this way: "Its much better to lose your phone than your wallet." Why? First, if you lose your wallet, all the cash in it will usually be gone no matter what, in most countries and most situations. So even if you are lucky to get your wallet back, you'll probably have lost the cash that was in it.

But what of the credit cards and banking cards and your driver's licence and other identity cards, etc. How tedious is it to replace those. How long will it take for you to be rush-delivered a replacement American Express card? And then imagine how much worse that all can be if you are travelling and where is the next place where you will be long enough for a Fedex delivery of your rush replacement credit card can even be delivered. Compare that to mobile. On mobile, your mobile wallet solution can have user-set limits that you can alter when you want, on what levels of payments (if any) can be authorized without security pin codes etc - so the mobile can work like a contactless card like Octopus, Oyster etc. But this is far more safe, because you can lock your phone with a password (that you cannot do for the contactless card) and you can further protect your banking access with its own limits and security.

Then take your credit card and banking card, with their "chip and PIN" security etc. That all is already built into the phone, but actually your mobile phone is far more secure natively than the best chip and PIN card. And this is before you then set your own limits if you want, that an be altered by the user, and the further security that can be deployed in the handset, in anything from thumbprint readers to retina scans to voice pattern recognition - all things that a plastic card cannot hope to match. And this is before we take the power from the network - like location-based security and proximity based security. If the network knows you usually move from your home to your office to the school of your children and the shopping center near your home it can provide minimal security at that level. If suddenly the mobile phone moves to another city - then it can be set to notice the unusual travel pattern - and only then ask for a verification password etc. Same for proximity, so imagine a family travelling. As long as the phones are together, no passwords are needed (its almost impossible for a pickpocket to steal simultaneously all phones from the pockets of four family members at the same time) but the moment one of the phones moves away from the group, the password protection is enabled. Etc etc etc.

HOW TO REPLACE MOBILE WALLET

But that was on the security side, actually the bigger benefit is if you lose your mobile. If you lose your cash, or contactless payment card, that money is gone. If you lose your credit card or banking card, you may lose some of your money and you have to call the bank to cancel the cards and then it takes at least days, may take weeks, to have your cards replaced. It will typically be even more of a hassle to replace identity cards like your driver's licence or passport.

But on mobile, the replacement is the fastest and most convenient. If your mobile wallet is enabled with your operator/carrier, all you need to do, is borrow someone else's phone, call your operator/carrier, tell them your mobile phone is lost or stolen (or broken, fell into swimming pool at your hotel). They will ask your usual security words etc, and then they can enable your full mobile wallet - including all your credit cards and bank accounts and payment systems exactly as they were - onto any other phone on any other SIM card you designate. So imagine the family dad having a bit of a show-off moment at the hotel, and falling into the pool, and finding that the phone is ruined. He just uses his child's phone, calls the operator/carrier, and has the mobile wallet functionality transferred to that child's phone (which daddy will borrow for a day before they can go to a phone store to buy a replacement phone for daddy).

This is BY FAR the most convenient way to replace lost or ruined or stolen or destroyed payment methods. It is far better to lose your phone, than to lose your wallet. And you are far better off, having your credit cards and banking accounts enabled onto the mobile than on any other forms like plastic cards. Now, obviously the retail world will need to catch up to this reality, only a few countries so far can do full payments in anything, in mobile, but that will soon evolve too.

Dave gave some interesting facts, like that Google has 750 people only in their payments team, this is far more than any telecoms operator and far more than any bank has in its mobile payments unit. No wonder Google Chairman Eric Schmidt said last year that mobile money was one of Google's three highest priorities.

MOBILE BECOMES STORING MECHANISM FOR REPUTATION

And the most far-reaching thought Dave expressed that I think comes to the core of what Alan and I have been writing about in our book Communities Dominate Brands and Alan in his follow-up book Social Media Marketing and now obviously in his latest, No Straight Lines, is that thought of the power of the data collected. What Alan called the new Black Gold for the 21st Century. Dave said it like this: "Mobile is the mechanism for storing your identity and reputation." Its more than payments. Its more than money. Its on those themes that Jonathan MacDonald writes about 'Advocurrency' and companies like Qustodian now are working on to help us manage our identity and reputation and its value, via mobile. Imagine how much information a retailer loyalty card will collect about us. Imagine how much information a credit card or bank account will collect about us. And imagine how much Amazon for example knows about our preferences and purchases.

Now imagine a near future when all of those data points get collected via a single point, our mobile phone. And our consumption behavior can be combined with our communication behavior. Its not just that Tomi likes James Bond and will see SkyFall the next 007 movie, but how many people did Tomi talk to about the movie before and after? Did Tomi influence others to go see the movie. The power of mobile money will be multiplied when we understand the value of influence, and that mobile, will merge with money, will merge with identity, will merge with communications, will merge with influence. That is why Google is in mobile money haha..  That is why this is such a huge race.

Excellent presentation Dave, truly excellent with great insights. 

No Straight Lines: making sense of our non-linear world

Coming home:

This is something of an emotional milestone for me, an emotional coming home.

As Tomi wrote - we set up Communities Dominate Brands - the blog when we published the book of the same name. We had no idea what would happen - but it became an extraordinary platform to connect with a global community. And in fact is now voted in the Forbes No.1 read blogs on mobile.

There came a point however where I felt I could not continue for reasons that were personal as well as professional. My dismay over 6 years of watching media / mobile and business organisations systemically destroy themselves (Tomi has a point of view on this) as we migrated from a linear to a non-linear world was overwhelming.

My turning point was an infamous meeting with the largest regional newspaper group in the UK, plus multiple engagements with Nokia and other major mobile and media players - where one could see these incumbents were driving down the road to oblivion. And of course they were not the only ones. Why I asked myself should I run a business trying to help those that can't help themselves?

So I went on a journey

A road less travelled

As I continued to research the evolution of the media and the commercial communication environment, I had a dawning realisation that what I was witnessing was something deeper, more profound and epochal. It was in fact a communications revolution with deep social undercurrents that are having and will have a profound effect on every touch point of our society and our daily lives. And there is no doubt that technology, particularly communications technology, can be wielded as a powerful agent of social and political change. But we seem to have arrived at a crossroads, and this makes me fearful that too few truly understand the underlying reasons for what’s happening now or the implications of what happens next. Too many companies are locked into a linear system, a framework and model that only allows them to look at and engage with the world in a particular fashion. And this communications revolution is not about just companies and organisations; it is about us – you, I and society per se.

The death and life of eco-systems

We are witnessing the death and life of two very different eco-systems - one which we started to describe in Communities Dominate Brands - and which is now truly redefining our world.

No Straight Lines: making sense of our non-linear world

The result of that journey is the publication of a new book NO Straight Lines: making sense of our nonlinear world -

In brief I explain the project

We have arrived at the edge of the adaptive range of our industrial world. At the edge, because that world, our world is being overwhelmed by a trilemma of social, organisational and economic complexity. We are in transit from a linear world to a non-linear one. Non-linear because it is for all of us socially, organisationally and economically ambiguous, confusing and worrying. Consequently we are faced with an increasingly pressing and urgent problem, WHAT COMES NEXT? And also we are therefore presented with a design challenge: HOW do we create better societies, more able organisations and, more vibrant and equitable economies relevant to the world we live in today? No Straight Lines presents a new logic and inspiring plea for a more human centric world that argues we now have the possibility to truly transform our world, to be more resilient, to be more relevant to us both personally and collectively, socially cohesive, sustainable, economically vibrant and humane, through the tools, capabilities, language and processes at our fingertips.

You can find the book online at Amazon.

Jo Pine author of The experience Economy and Infinite Possibility writes  ‘Anyone worried about where business is going in today’s chaotic world – and everyone concerned with where it should be going – must read No Straight Lines. Alan Moore has captured what is happening, but more importantly provides prescriptions for what individuals, companies, and society should do about it to create a better world’.

A little intro:

  

Its good to be home.

you can follow me on twitter @alansmlxl

 

 

The Wisdom of Fundamental Curves (Revisited in 2012)

Leonid Brezhnev Kurt Lewin said there is nothing as practical as good theory. I had the honor of presenting a keynote to HSM the biggest business/management conference of Brazil, in Sao Paulo in the Autumn. I knew that my audience was less 'techie' than usual, and more of mainstream management. I wanted to offer them value out of my keynote and I went back to a favorite theme of mine that I occasionally use, the Fundamental Curves. The presentation was exceptionally well received and as word spread about it, I promised I would write about it. To give you, my blog readers and my Twitter followers a chance to read what I talked about in Brazil. What is all the hoopla about..

THE INEVITABLE SHIFT IN FUNDAMENTAL CURVES

Its funny, I noticed that it was in my second book that I discussed the Fundamental Curves. That book - m-Profits (the world's first business book on the mobile industry) introduced Fundamental Curves with this sentence: "In this chapter I will examine the inevitable shift in the near future of access devices in what I call the 'Fundamental Curves'." That book turns 10 years of age now in 2012 haha..

In the book and my presentations at the time, I used the fundamental curves to explain the relationship of fixed telecoms vs mobile; of the PC based internet vs mobile internet; of email vs SMS; of PDAs vs smartphones; and of stand-alone cameras vs cameraphones.

A fundamental curve has an insight based on the concept of 'inevitable'. The curve must conform to evidence that its pattern is inevitable. When you have two fundamental curves that intersect, that gives incredibly powerful insight. If you can find such fundamental curves before the intersection has happened, you know a transition will happen in that industry: inevitably. You will then have a powerful strategic insight that you probably can use to your business advantage.

And an immediate example: Facebook has passed 600 million users. Its growth has been breathtaking, and I have heard some analysts say its growth has been the fastest to that level of any new tech or service. But will Facebook reach 7 Billion users ie the full population of the planet. No. While its growth is astonishing, Facebook is constrained by the global penetration rate of the internet. There are only about 2 Billion internet users (including home and office users, shared users like family PCs, schools and internet cafes; and mobile internet users). So Facebook will hit a natural barrier which is the penetration of the internet. Maybe the internet will reach 100% of the planet but certainly not with PCs. And unless the internet penetration reaches human population levels, FB cannot get there. So Facebook reaching everybody is not inevitable.

But mobile phones will reach everybody (at least everybody who has learned to read and write, and everybody who still can remember how to read and write). The mobile phone penetration rates exceed the human population in more than 60 countries already. You see the difference? Mobile penetrations were an inevitable trend, Facebook has not yet been proven to be so (it may end up being one, but currently evidence does not support that view). 

HOW DID I GET HERE

I first was faced with a situation of Fundamental Curves when employed by Elisa Corporation / Helsinki Telephone and the Finnet Group including Radiolinja in Finland. This happened in 1996. I was literally the world's first person to observe certain facts about our industry, that seemed impossible. I had been tasked by my boss, Matti Tossavainen, to build the Elisa Group's first 'bundle' of telecoms services. I was meeting with my peers, the various product managers and product line managers of the Elisa Group, to examine the data of their services, to consider which two services would be bundled with my service, the international calls which were branded "999" based on our international calls dialling prefix. Some who have followed international ice hockey over the years, may remember the Finnish hockey team tends to have these weird 999 number logos on their jerseys - thats my old product and we had a lot of affiliation with Finnish ice hockey.

So for my service bundling project, I met with Mikko Heijari, the product manager for "950" GSM call services, ie our mobile voice calls product manager for the Group. Finland was at the time the run-away leader in mobile phone subscription penetration rates worldwide, and our brand, Radiolinja was the world's first digital cellular service running on GSM and we were far ahead of our rivals in GSM subscriptions. Mikko's product was not just in the world's most advanced mobile market, his product was the clear market leader. And Mikko was of course trying to convince me to use his product as one of the three to be bundled.

I remember it was early Spring and the quarterly data was not out yet, even internally. What Mikko did, was to take the latest available data, and then project that to the end of the month, to show how dramatic the current picture was. I was stunned. The numbers he showed me, suggested that the growth rate in mobile phone subscriptions was accelerating, not slowing down. And we in Finland had for several quarters dumbfounded all experts with unbelievably high mobile phone penetration rates.

Based on the early numbers I prepared a proposal to use mobile phone calls as one of our bundled services (with long-distance calls the other) and took the proposal to my boss. We examined the data and by this time the first internal numbers were coming out and Matti was sold. I had won my argument to make mobile phone calls part of our bundle. At that point, I unknowingly had started the project that would create the world's first fixed-mobile converged service.

But it also meant, that I became intensely aware and interested in the curious pattern of mobile phone penetration rates - as obviously my reputation within the company was now tied to whether this phenomenal growth would indeed happen with the mobile side. At the end of 1996 Finland's mobile phone penetration rate had passed 28% per capita. By the end of 1997, Finland's penetration rate growth had increased further and passed 42%. We would sit with Mikko when each newest quarter data would come out, and study the numbers and look for when will it start to slow down. And in the Autumn of 1997 I remember having the meeting in Mikko's office when we studied the latest numbers, when it hit me - this pattern will shoot past fixed landline penetration rates.

That was an unbreachable barrier. Esteemed telecoms gurus had explained why it was utterly impossible for mobile phone penetrations ever to match, far less exceed, the fixed landline penetration rate. I remember looking at the numbers, taking out my trusty HP LX200 PDA and doing my calculations and looking at Mikko and saying - what I could not believe my own ears with me saying this - that in two years mobile phone subscriptions would exceed landline penetration rates in Finland. This was with the most pessimistic scenario. In two years (the reality was one year). Mikko looked at me, my math, and then plugged the numbers onto his PC and he had to verify it for himself. The trend was 'inevitable'.

WHY MOBILE CANNOT EXCEED FIXED LANDLINES

Today nobody doubts the facts. But back in 1997 and before, it was 100% accepted mantra that it was physically impossible for mobile phone subscriptions to exceed landline penetration rates (in the Industrialized World; it was theoretically possible for Emerging World countries to 'leapfrog' the landline and go straight to mobile). Nobody doubted this, not even we - the people of Radiolinja and the world's first GSM operator, the challengers of Finland. Even we did not believe it could happen.


Here is why. The thinking was, that in the Industrialized World, with over 100 years of the telephone, the penetration rate of the telephone had reached saturation. Every household and every office was wired for the telephone. When you do the math, the penetration rate came at between 58% and 62% per capita across Western Europe, North America and Australia, plus the affluent countries of Asia.

Then there were elderly people who had no need to be 'mobile' ie didn't have a need for a car (anymore) and were for example living in an old folks' home. They still had a landline telephone but would quite understandably have 'zero' need for a 'mobile' telephone. Not to mention with mobile you had to buy the handset and the voice calls were more expensive, etc.

So even if every 'other' telephone like home phones and office phones were replaced with mobile, there was a significant portion of the telephone network with these elderly people who absolutely certainly would never ever in a million years, be buying mobile phones and attempting to learn to use that difficult new and expensive technology.

It made perfect sense. And I had heard big experts say this at big telecoms conferences, and I had read these theories in the major journals of the industry etc. I truly believed it to the core of my heart. And now I was staring at numbers which told me that the world was not flat. And like I say, 'numbers are my buddies' - I decided that my numbers are right, and all the biggest gurus and experts were wrong. The numbers do not lie.

So yes, I showed these to Mikko, who was equally stunned. And then we took them to Matti Tossavainen who was also astonished. Matti was so much the skeptic, he actually convinced me to 'reconsider' and to wait until the next quarterly data came out. But in my heart I already knew that my numbers, my buddies, had shown me the light.

TWO INEVITABLE CURVES

So the Fundamental Curves? One was clearly proven fact, that landline penetration rates will plateau and stop growing when all households have telephones. So that line will 'flatline' ie run about parallel to the horizontal. And then there is another penetration rate - that of mobile - which was still accelerating in 1997 and would crash through the landline penetration rate and continue to grow. There you are: two Inevitable Patterns that cross. I was the world's first person to see that mobile phone penetration rates not only could grow past fixed landlines, but that they indeed would.

I remember having several heated arguments about this with many experts in Finland and at international telecoms conferences in London and Brussels etc over the next few years. And the Finnish pattern proved itself in late 1998. Many experts believed the numbers were faked. Then Norway and Hong Kong followed in 1999. And Italy, Sweden, Austria and the UK in year 2000. By this time even the big experts had to accept that it was no fluke, this would be a global trend.

Now, as regular readers of this blog know, I am nothing if not curious. So of course it was not enough for me to spot this trend, I wanted to know why. Why did we break the impenetrable sound barrier in Finland or perhaps more aptly, passed the unbreachable speed of light haha.. Why?

And so I dug into all kinds of data with the help of Mikko and the other experts of the mobile side of the company. I found out that some perfectly normal 'non geeks' would actually carry two phones. The most common use was that one phone was a work phone, and the second phone was a private phone. Another common use was that the phones were on rival networks for many reasons including network coverage and pricing differences. I also found that bewilderingly, perfectly normal high school age kids in Finland were starting to have their own mobile phones. Teenagers! So where a family of four, with two teenagers, would typically have one home landline phone (and both parents would be reachable at work so the four people had three landline connections ie about 75% penetration rate in this simplified example) with both teenagers having their own mobile phones, and both parents having mobile phones, the household had one landline but additionally four mobile phones!

By 1998 we were starting to see the early evidence of households abandoning landlines and going purely mobile. So I had not just seen the numbers, the absolute evidence, but I was now starting to have insights into why the impossible had happened. Fast forward four years, and by 2002 I had started to obseve several similar instances of 'Fundamental Curves'. I had now learned to look for this phenomenon and gain the insights out of it. It made me seem often very 'smart' haha, in the ability to see into the future.

FUNDAMENTAL CURVES, REVISITED

That makes sense really only from a historical point of view, and we don't need to be convinced now ten years later, that there will be more users of the mobile internet than fixed internet, or that cameraphones will be used by more people than stand-alone cameras, etc. When I was preparing the HSM presentation, I dug into the Fundamental Curves and also looked back into my first data points (fixed vs mobile). 

Some technologies come and go, like the steam engine, the dirigable (zeppelin airships) and the telegraph. Others arrive and by all signs will never leave us, like the wheel, electricity and television. When I first used the Fundamental Curves thinking on mobile, I had accepted that the other Fundamental Curve, the fixed landline penetration rate, would remain stable - a perfectly horizontal curve. It didn't occur to me back then around 1997 to 1999, even as early evidence started to trickle in, that landlines might diminish (to the point of possibly disappearing completely some day, like the telegraph, the Zeppelin andwhat is now happening to fax).

With enough time having passed between the last time I had seriously calculated this pair of Fundamental Curves and today, the picture was strinkingly obvious. Landline penetration rates will decline. They have turned globally into decline already several years ago, and in Finland more than a decade ago. I have known this and reported on it in my books for many years, yet I never connected the dots, that this also alters the 'Fundamental Curves'. What we have now seen, is a kind of cannibalization effect, which appears after the cross-over point. And... inevitably.

Lets compare. The second evidence for me was the PDA vs Smartphone battle. Yes, the pattern holds, PDA sales turned into decline after Smartphones shot past. Then email vs SMS. SMS user base shot past email a decade ago. Last year we heard that email has plateaued, and some analysts believe email user base declined last year. Certainly every market reports that the youth are abandoning email comprehensively. So if it isn't happening yet, it will definitely happen as that generation gets jobs. Next, cameraphones vs cameras. Yes, the evidence is out that camera sales have peaked and are now in decline. Wow. The Fundamental Curves are teaching me again something new. Numbers are my buddies! Even this grumpy old man can learn something new...

REVERSE LETTER U

I have written before that mobile is the ultimate cannibal. The formula for mobile phones is:

A + B = A

where A is a mobile phone, B is anything else (camera, PDA funtion, music player, GPS, video recorder, internet browser, etc). Or to put it in words, its like this:

Mobile + Anything (soon becomes just) Mobile

Think cameraphones. Early on we added the camera to the phone. There were mobile phones and 'cameraphones'. Today every mobile has a camera. Same happened with music players. Midway in the past decade there was a class of mobile phones that were 'musicphones' but today every phone has a media player. And so forth. Mobile plus Anything will soon become just Mobile.

Now when we take any rival technology that intersects with mobile, its growth will cease, and soon thereafter, will start to decline. So the shape is like a very shallow letter U, but reversed. It grows, then plateaus, then turns into decline. All after it has intersected with mobile. 

I was immensely excited when I saw that the data fit this pattern almost perfectly. Where it was not perfect, there is very strong possibility that it is only a matter of time. So for the HSM presentation I took the following list of pairs of services and products, going through the Fundamental Curves: Fixed and mobile telephones; email and SMS; PC and smartphones; and lastly mobile and fixed internet. Then I argued that I can see the early signs that this same pattern also repeats with money! (cash vs mobile money).

First, understand the time frames. This does not happen in a couple of years. This takes literally a decade or more. But the beauty of 'inevitable' is that it is certain. That is the nature of Fundamental Curves. I cannot promise you that this happens with Facebook and Twitter, we don't have the evidence and I don't know if the pattern is applicable within internet services. But at least on all those examples I listed (plus we have also seen it already in musicphones vs stand-alone music players) it is clear.

There are at least four dramatic lessons you can take from any instance where you find a Fundamental Curves situation. First, that obviously mobile will not stop growing (yes, it will eventually stop, but not into the foreseeable future). Note that this means you have insights where almost all experts claim the opposite. Have you seen how Tomi Ahonen has been 100% correct on SMS forecasts every single year since my first such forecast in year 1999? And essentially all the other experts were wrong? Time and again, they promised us in 2001 that SMS was slowing and would be replaced. In 2004 we were to have witnessed the peak year for SMS and the fad would pass. That 2007 was going to be the pinnacle but that SMS would soon disappear. That SMS would start to die in 2010. And so forth and so forth. They didn't believe in Fundamental Curves and thought that SMS would soon vanish. If the conventional wisdom is wrong - and you know it is wrong - you can make a fortune with the contrarian - but true - insight. (on Twitter at this point you'd see Tomi doing the SMS Dance..)

Secondly, is the converse, that the usually dominant (in this case non-mobile) technology is going to be superceded. If mobile phone subscriptions will exceed landlines. Then it is only a matter of time when voice calls on mobile will exceed those on landlines, and so too will voice revenues on mobile. And if so, it means that mobile companies will grow to tower over their fixed landline cousins. And for the CEO of BT or AT&T to sell their mobile arm and keep the mobile arm will prove a disasterous decision in the long run (as we have seen).

Thirdly there is going to be a cross-over point. This is a dramatic point that will be widely reported and its passing will shift the insights in the industry. You have foresight into a major moment in the industry. When is the right time to go from simple services on mobile to smartphone apps for example. Or when to shift your customer service priorities from email to SMS etc. The competitive advantage 'window of opportunity' is open up to the cross-over point, after that you are only copying the industry and cannot really gain an advantage anymore.

Fourthly there is the end-state. This is the astonishing lesson I just learned a few months ago when preparing that keynote presentation. Yes, all these technologies, after facing mobile, will fall to their demise. It won't happen overnight, and technically it might not reach zero, but for a global mass market service or technology, the numbers will be so tiny as to being economically irrelevant. Its like horse-drawn carriage makers - they still exist but obviously compared to cars, the carriage industry is irrelevant in its size today.

NOT EVERYTHING MOBILE IS INEVITABLE

Note that not all things are inevitable, not even with mobile. We have good examples like video calls and LBS (Location Based Services). Other times the 'inevitablity' may be altered due to timing - such as the delays with 3G launches at the previous economic downturn or the slope of the 'mobile' curve may be at a slower rate (or faster rate) than we thought, such as happened with early MMS projections where we as an industry misundertood MMS to be more like SMS and email (which it isn't) and didn't see that as a mass media channel, MMS is a super-charged SMS. There was a fundamental curve for MMS, only it wasn't going to replace SMS (and email) as we originally thought. (for those who don't know, MMS is now the world's second most used data application/service behind only SMS and far bigger by number of users than email or Google search or Facebook etc).

And obviously there are some cases of a service or feature we have on our mobile phones that will almost definitely never replace its dominant sibling. Take light. We have 'torches' or 'flashlights' on many phone models. Others with larger screens have a 'light' function and if you don't have one, just take a picture of a blank piece of white paper in daylight - and you have a perfect bright light on your phone you can use if the electricity is suddenly cut off in your town, or if you lose something in a dark place etc.. So yes, we can definitely use our mobile phone as a light source. But it will not replace the light bulbs and light fixtures in our homes for example. So yes, mobile phones replaced our fixed landline phone at home (and our alarm clocks at bedside) but while we can use the mobile phone for our lights, we won't be doing so (ever).

And with some things the jury is still out like with smartphone apps. The pattern with the smartphone apps 'economy' is dangerously near that of a tech bubble (massive numbers of free downloads and woefully little actual commercial success either from direct revenues or advertising - this is almost exactly what led to the dot-com bubble bursting a decade ago). The Fundamental Curves phenomenon has to satisfy the evidence of inevitability on both curves involved.

And I am sure it is not restricted to mobile, its only that I study mobile. So I'm sure there are fundamental curves in other industries - air travel went from dirigibles (zeppelins) to airplanes. The airliner propulsion went from propeller-driven to jet driven enignes. In automobiles the early steam-powered vehicles were replaced by gasoline-powered combustion engine cars, but since then while diesel engines took over essentially all trucks and busses and heavy vehicles, diesel engines don't seem to be on any inevitable trend in passenger cars (but don't argue that point with me, I am not an expert on the car industry, I honestly don't know the trend lines). Probably electrical engines will take over with time, or hydrogen or whatever.

After my first encounter with the Fundamental Curves, the early cases were accidents, but because of my experience, I was very quick to notice where another situation of Fundamental Curves existed. And as mobile has been the fastest-growing giant industry ever in humankind's economic history, those cross-over points have come rather quickly. And after I had seen a few of those, I started on a quest to discover situations of the Fundamental Curves, and this has been behind some of my most famous forecasts more recently, where I have been the first to make a huge cross-over prediction such as that of when musicphones would be outselling MP3 players including the iPod. And more recently for example that SMS will pass voice call usage on mobile phones. If you use the Fundamental Curves method to study your opportunities in mobile or elsewhere, it can help you make the right strategic choices.

And if you do find new insights with Fundamental Curves (or by any other means), don't be afraid of the arguments. I've been through this many times. Remember what Thomas Carlysle said of invention: "Every new opinion, at its starting, is by definition a minority of one." So if you do discover something truly new, then you have to convince the rest of the world to believe what you know is true. That means you have to argue it with everyone. Over time you'll find others who buy in, and who will spread the story too. But years and years later you will still find those who refuse to face those facts and you have to go through that argument once again. It is quite exhilirating to know you are the first person on the planet to have recognized some new fact or phenomenon. But after that comes the responsiblity to spread the story - and that does mean you have to 'convince' all others - nobody else does know this and you start off as an absolute minority of one against the world. If your facts and logic is sound, you will then find people willing to listen and some willing to accept it.

STRATEGIC LONG TERM CHOICES

So take HP and Dell and Lenovo etc. PC makers. The Fundamental Curves says that one day the modern PC will cease to have a mass market business. It might happen as soon as at the end of this decade and definitely by the end of the next decade. Replaced by what? Smartphones of course. Apple sees this as does Fujitsu and Google (and probably Microsoft although their behavior doesn't really suggest that). So which company is being run by smart CEOs with a long-term vision and who are the morons who will go out of business? HP's decision to abandon the Palm based smartphones is a perfect example of making the wrong choice. You can be 100% sure that if Steve Jobs was forced to pick keeping either the Macintosh or the iPhone, he'd have kept the iPhone. But HP abandoned its smartphone and kept the PC. This is like AT&T selling its wireless arm (or BT selling O2). Idiotic decision. The CEO didn't understand the Fundamental Curves.

So that is what was on my mind when I gave my keynote in Sao Paulo. And the audience loved it... I will be showing more of the Fundamental Curves thinking at conferences and workshops this year. If you would like me to speak to your audience whether a public conference or one of your customer events, or an internal event for your staff, I'd love to be there. Just drop me a line at tomi (at) tomiahonen (dot) com and we'll set the wheels in motion.

PS thank you eduardo for correcting the original source of the opening quotation. I had seen it before attributed to the past Soviet Union Premier, but clearly Kurt Kewin said it first, and am happy to attribute the quotation correctly. 

Lets Talk About Mobile in Retail

I had the pleasure of returning to Toronto to present at the Mobile Media Week last week, where I did a pair of keynotes, to the Mobile Think Tank, and the Mobile Biz Bootcamp. In the bootcamp they had one of the focus areas on mobile commerce and we heard from many retailers what they are up to in the mobile space.

So this blog is not about mobile banking or mobile credit cards. It is not about 'all' mobile commerce, ie any digital goods sold directly to a phone do not really involve (or need to involve) bricks-and-mortar type of retail. So our music, movies, videogames, airline tickets, insurance etc do not require a separate visit to a retail establishment, because the service (or proof of purchase of service) intended (music, movie, game, air ticket, insurance etc) can be delivered completely to our phone.

That is only a minority of our retail. What of the locksmith, the hairdresser, the dentist office, the florist, the clothing retailer, supermarket and drug store - the typical 'high street' or 'mainstreet' shopping experience in any small town on the planet. What of them? If you need your locks changed, that cannot be done 'remotely' via a mobile phone or the PC. Or your haircut? Can't be done directly via mobile. Mobile can show you what your new haircut might look like, virtually, but the actual hair still needs to be cut with actual scissors by an actual hairdresser or barber. That can't be fulfilled via mobile. So lets look at the real bricks-and-mortar retail establishments. What is the role of mobile to them?

THREE AREAS

Its three-fold. There is 'marketing communication' (ie advertising) we can deliver to our customers before they come to our store - and use mobile also to 'drive foot-fall' ie drive actual human visitors to our stores. This is very important in an era when e-tailers like Amazon and Expedia and Ebay are expanding their product offerings and trying to sell everything online (and increasingly also on mobile). If you own prime retail space in the main shopping district in your town, you want your customers to keep coming to your stores and make purchases there. Mobile is a new way to help drive visitors to your store.

Then there is the experience within the store. As the retailers get to know mobile, they notice it is a very powerful activation tool for customers already inside their store, to help them try something, go to a different part of the store, and to engage with the customer, assisting with the shopping experience - all this while of course hoping to sell them more stuff, and differentiating the shopping experience from that inside other shops today. In a very small shop - imagine a typical jeweller for example - there isn't much movement inside a store, but then consider the megastores by retail giants - you can literally get lost inside a super-duper-store..

The third experience is after the shopping experience. The mobile goes everywhere, where our shopper goes with the newly bought goods. Even if your customer bought condoms for having sex, yes, that weird statistic from earlier this year, that 10% of British youth think its ok to send SMS text messages while having sex..  So yes, the mobile will follow your customer to wherever they go, including the bathroom and the bed.. So every loyalty program should start with mobile: a mobile is carried even when the wallet is not.

SOME EXAMPLES

Lets take concrete examples. The examples of the first kind are most common, because that is usually where most mobile marketing will know to start. Its the 'obvious' bit. I have spoken a lot about some early pioneers in this space, like the Guinness beer Java app for the Rugby Sevens tournament here in Hong Kong which offered clever utilities to the international tourists who had travelled to Hong Kong for the big international rugby tournament. So it offered the rugby scores and stats and team rosters and biographies of the star players and all what you'd expect from a sports news service. Then it offered the typical tourist guide advice, the maps to Hong Kong, where is your hotel, where is the nearest MTR subway train station, etc. It was very innovative in pre-installing a series of links to short phrases said in Cantonese, so the English-speaking tourist could just click on a link on the phone, and the phone would 'speak' in Cantonese, telling the driver where to go, or asking the bartender to order a pint of Guinness beer etc. All makes sense.

So far we have the elements of any good sporting/travel related mobile web service. The whole thing was delivered via a Java app, so it works on 80% of all the phones on the planet (where an iPhone app would only work on 2% of all of the mobile phones in use, Android even less today). Then the clever bit about retail. You wanted the Guinness app to drive 'foot-fall' and to pubs that sell Guinness of course? And yes, it of course had included Guinness-serving bars listed on the maps it showed and helped tourists find the nearest pint of Guinness in Hong Kong.

How successful was it? Sean Rach of Ogilvy reported in Singapore earlier this year, that the Sevens Tournament Guinness app in Hong Kong had boosted Guinness sales by 25%. That is good use of mobile to drive retail sales.

In Toronto we heard for example from Chris Borek who runs the mobile initiatives for US retail giant Target stores. They have of course the mobile service that allows consumers to find out which of their Target stores has a given item in stock, and how many of those items are in that particular store, etc. This is all pretty 'obvious' to retail chains to consider when they start to deploy mobile marketing to their consumers.

I have countless such stories that I have collected into my 'Pearls' (and have many in my ebook as a collection of advertising related pearls in ebook Pearls Vol 1: Mobile Advertising). Mobile is used to drive retail visitors to stores from the Puma adver-game in China, to Victoria's Secret when they opened their new store in Chicago, to Borders bookstore, which reported 23% response rates to their personalized book offer coupons delivered via mobile. Perhaps the best known campaign is BMW's winter tyres campaign two years ago, which achieved a 30% conversion rate - measured actual purchases, driven by a simple personalized MMS campaign. And the world record as far as we know, is still the Gillette razor campaign in South Korea - where 98% of the mobile coupons were redeemed. Imagine that, a 98% conversion rate for a mobile coupon campaign.

Where e-tailers are direct rivals to the traditional bricks-and-mortar store, mobile is a friend to the traditional store-keepers. Mobile helps you bring visitors to your store. But it can be far more than that. However, before I go further, I have to make one obvious point.

MUST BE OPT-IN

Mobile can drive visitors to your store. But please don't think of the idea of the Tom Cruise movie 'Minority Report' and its style of personalized spam ads delivered by location. That idea of location-based ads delivered to random walkers-by is a myth, it is economically not viable and it is hated by consumers. Do not bother to spend one minute planning any location-based spam ad campaigns. If you're lucky you might get a tiny percentage of success but nothing like these award-winning campaigns I mention in this blog.

All of the above campaigns that I mentioned were on the basis of opt-in. You have to build your mobile marketing target database by opt-in basis. That is a slow process and you have to start now. But it can be incredibly powerful. Consider Japan. Today, out of the total Japanese population, one in 8 Japanese citizens has already signed up to receive coupons from McDonalds! Why would McDonald's ever bother to waste the money on advertising on TV or magazines or movies or radio - all of which are media where the majority of the message goes to consumers who are NOT customers of yours. When McDonalds can now reach the actual pockets of their actual consumers who not only use their products, but like McD enough to accept their offers and coupons and marketing, onto their mobile phones. Please do remember, Japan is a fish-eating nation (sushi bars are the real fast food of Japan) so 1 in 8 in Japan is an awesome achievement for McDonalds.

IN-STORE

The clever part comes to allow customers to engage with you when they are in-store. This is still in the early stages. But mobile should be used to move the customers around the store, to bring them to try new things you sell, and of course to offer them instant coupons and discounts and offers. Here we have the power of various non-cellular technologies we can use, such as Bluetooth and near field and even WiFi. We can also create further engagement of our current customer in our current store. I heard two great innovative examples this summer. In Singapore I heard of the Adidas store promotion, which was the world's first use of Augmented Reality 'in the first person' - when they introduced the digital mirror that allowed instant fittings of t-shirts with the help of a simple cameraphone and their clever use of the digital mirror. I blogged about it earlier so if you don't know the example, please take a look here (Adidas introduces first person AR)

Even more powerful is the idea from Tesco that I just heard three weeks ago when in Brazil, speaking at the Mobile Marketing Forum run by the Mobile Marketing Association in Sao Paulo. Tesco the UK's biggest supermarket chain, is now offering its intelligent shopping list service. The logic of using the mobile phone as your shopping list is pretty obvious for most consumers. The phone is always with us, so we can easily see what needs to go to the shopping list. If we integrate that with our Tesco's shopping experience, Tesco can offer to add items from our previous shopping visits directly to the shopping list - and using 2D barcodes (QR codes) they can make it really easy at one click to add new items to the shopping list while in the store, etc.

That all is 'to be expected'. A shopping list is very 'unsexy' and of little interest. Until we get to the magical part. Tesco's will ask you which Tesco store you want to visit, and then Tesco will automatically re-arrange the shopping list, in the order of the items in the shopping aisles - of that particular Tesco Store! Awesome! It is 'magical'. It is like Tesco and our mobile phone is reading our mind. Even as the stores will periodically re-arrange the stores completely (and confuse us shoppers..) - this app knows what was re-arranged and still intelligently routes us inside the store. And if we go to an unfamiliar Tesco store today - like the new one at the mall that just opened, all we need to say to the app is which store we want to go, and the shopping list is re-arranged based on the aisles of that store. Awesome!

Now, the really clever bit is of course under the skin. Its not that we help Tomi Ahonen do his shopping. Tesco's would know from my purchase pattern that Tomi clearly prefers Pepsi to Coca Cola. Well, if Tomi is using the Tesco shopping list app on the phone, next we will have Tesco selling incredibly powerful info to Coca Cola. Did you know Coca Cola, that a regular Pepsi drinker is now in Aisle 4 of Tesco store number 107, and on the next Aisle (Aisle 5) there are the soft drinks? Would you like to send a Coca Cola offer to this Pepsi drinker? We can actually identify the point of when a purchase decision is being made

Now, how important is opt in and personalization in this case? Tesco's has to have asked me permission to send marketing to me. And I will have had to have selected soft drinks as one of the categories for which I say yes. But yes, as I walk on the aisle, and I approach the soft drinks, and I am looking at my phone (as I am reading the Tesco shopping list)! - I receive an instant coupon for 2 bottles for price of 1 from Coca Cola... Or perhaps Coca Cola sends me a trial offer of one of their new flavors like cherry coke, vanilla coke or whatever new they now have..

Note, Tesco will not reveal my name to Coca Cola. Tesco will not sell my phone number to Coca Cola. Tesco will not violate my identity in any way. If I said no to soft drink ads, Tesco will not even bother to tell Coca Cola. But if Tomi Ahonen said yes to soft drink ads, then Tesco can tell Coke that there is 'a Pepsi buyer' in that very specific store. And it will be Tesco, not Coca Cola, who will deliver the ad to me. I have not given Coke permission to market to me. But I will appreciate Tesco trying to find me good bargains in areas that I am interested in..

But very VERY importantly, Tesco know me well from my past purchase patterns. They know what TYPE of product of Pepsi I buy. I am buying regular fully caffeinated Pepsi, not sugarfree Pepsi Max, so Coca Cola can equally target me very accurately with their corresponding product(s). Because Tesco knows this, they can help Coca Cola give me the best possible offer - don't sell me Diet Coke haha, this customer doesn't buy any diet sodas, ever!

Tesco also know what format I buy. I don't buy the 2 liter or 3 liter bottles, I buy several of the small bottles. So again, if Coca Cola tried to sell me a 2 liter bottle of Coke, it would be a waste simply because I never buy any soda at that size (I live alone, that amount of soft drink would go stale long before I had finished the bottle). Tesco can help optimize and target the ad for its retail brands and also deliver for its customers the best value.

Think about it. If you don't have a strong brand preference one way or the other, and you got served discount coupons instantly while in the store, of only those goods that you buy anyway - I would never be offered baby diaper offers for example, as I do not have kids. And I use an electric razor, so I wouldn't get any offers of Gillette razors etc. Only the stuff I really buy, in the categories I buy. Totally relevant offers to me...

This is still only the beginning. We can do games in the stores, have customers collect points for visiting a specific department or desk, or viewing a particular promotion or engaging with an automated digital marketing gadget like some touch screen promotional panel for example. Give our customers some loyalty points or chances to win some trinkets and soon they cannot imagine shopping without having the phone in their hands all the time. And remember - get their permission to promote to them - and don't abuse that permission.

AFTER STORE

The part least understood so far, is the after-store experience. Retailers do not quite understand this part - that the mobile phone is upon our person - even after our wallet is not there anymore - we take our phones to the bathroom, we sleep with the phone in bed with us, and most amazingly, we keep the ringer on, while in bed. So mobile can even reach us in our sleep. No other mass medium has ever had such a total reach.

What can we do with this? Its the obvious channel to use for customer feedback. In Singapore today all three mobile operators do this with the visits to their stores. If you visit the mobile operator (carrier) store, after you leave you will receive an SMS message asking you if you were satisfied with your visit to the store. You can respond by simple SMS saying yes or no. That message obviously is not charged to your phone bill. And what if you say you were not satisfied.

Mobile telecoms competition in Singapore is already so mature and customer-oriented, all stores do this - if you say no, you will receive a call from headquarters, from a senior exec in sales, who will talk to you personally to find out what happened. And obviously that senior sales exec will be calling next the store manager of where you visited and that store manager will go have a talk with the sales clerk who may be having a bad day today, or perhaps did not pay attention to the training, or who - perhaps, if this pattern holds - is not really suited for a customer service job like retail. Imagine how powerful management tool this is, if you let customers talk directly to sales management...

This is the newest and most difficult part of the use of mobile in retail, so its rather easy to see that its the mobile operators/carriers who are first to adopt this. But it can also be simple other things like loyalty points, like follow-up communications, like updates, accessories, etc. Since we know what you bought, we can follow up.

In the USA, Rite Aid the pharmacist retail chain is now letting its loyalty card holders register their cellphone number to the loyalty card. Then the customer does not need to carry the Rite Aid printed loyalty card anymore, but only give the phone number at the cash register, to collect the loyalty points. Clever. But what does Rite Aid do with these customers? As it sells prescription drugs for example, it can send alerts when a given prescription is about to run out, a few days before, and remind the customer to go get a doctor's authorization to renew the prescription before it runs out, etc. This kind of 'after-care' is what mobile is by far the best tool to use.

Finnish libraries do that, by sending reminders to the library users two days before a book is due back, to remember to bring it back, and allowing the user to re-new the book loan via SMS (as long as the book is not ordered by another library patron). Isn't that cool. Renew your book by SMS, rather than lugging the books back to the library to be stamped...

CLEVER BITS

There are some other clever bits to retail use of mobile that I want to mention. One magical opportunity obviously is AR, Augmented Reality. But AR is currently mostly limited to smartphones, so your AR solution is one to deply at a later stage, when the basics have been covered. But consider this for magic. Ikea has an AR app for some smartphones, that allows you to select any items from the Ikea catalog, and 'virtually test' them in your home. To use the cameraphone view, to look at your own living room, then super-impose that new Ikea sofa onto the view, and see if the sofa brown color matches your curtains and goes with the coffee table you have, etc... That kind of thing. Magical.

Viral is another thing we should all be thinking of every time we are in anything with mobile. The Puma racing advergame I mentioned earlier, had this element. You get a chance to win Puma rewards if you are a good racer, yes, against other racers. But you also win Puma rewards if you are active in spreading the game to others. I love this idea. I just was in Athens this week at a customer event by internetq for several operator customers of internetq, where I was presenting about mobile marketing and advertising. And one of the examples I told was that of Orange Poland, who had this kind of incentive in their game (the daily prize was a BMW car, and they were promoting their new Club Orange). All those who were active in spreading the news about the game were also rewarded with points, which increased the chances of winning in the game. In all, the campaign was so successful that 1.5 million people participated - 13% of Orange Poland's total customer base. This is the kind of uses we need in all mobile campaigns. As Rudy de Waele likes to say, Think Global, Act Viral. Or how Fjord CEO Mike Beeston says, make all mobile services 'sufficiently contageous'. Viral is a very powerful element of mobile, we need to learn to use it well.

I just heard in Athens at that internetq event from Mike Walsh about fashion shows in Tokyo now, where as the models walk by, you can point your phone at the supermodel, and pick the item of clothing they are wearing, and order it on the spot, in your size, in the color of your choice, etc. Instant shopping. Cool, kawaii, as the Japanese would say. This is a sign of the things to come in the near future for all for us.

And back to foot-fall. We know that the mobile is unique to each person, so personal, we don't even share it with our spouces. So when phone number 123-456-7890 walks into your store, it is certainly the same person with that phone number as visited your store two weeks ago or a year ago. Certainly. So we can do great things with that information.

We need to have the customer tell us they're in the store now. The Rite Aid loyalty card or Tesco Loyalty card is one way. We can do many other things - why not create a game where you can register via a 2D barcode or QR code which is only inside the store. Each of our stores has a different code, when you visit, you have a chance to win, but give a chance to win something in that store for all who visited that specific store, then give a grand prize where odds increase for all who visit many stores... Make it a game to try to get your customers to visit as many of your stores as possible..

ENGAGE THROUGH WINDOW DISPLAY

The last thought I want to leave you with today, is about when the store is closed. You pay a massive rent for that prime real estate on that specific street in your town, for your store. Most shops are not open 24 hours a day. If your store closes at some hour, and is on the street (ie not a shopping mall which itself also closes) - then there are people walking by your store after it is closed. Your expensive store space is 'idle' for what, 12 hours of every day? We can do better, with mobile.

You have your window display. It is designed to try to bring people into your store. It can be a very powerful sales person while you are closed. Why not make an interactive advertising game into your window display, to run automatically overnight, to collect phone numbers and permissions of passers-by to join the game. So if you are a jeweller, offer a chance to win a men's watch at the end of the month - in that window where you have men's jewelry, and the chance to win the corresponding women's watch in the window where you have womens' jewelry. Run a small video clip on a cheap DVD or flat screen PC monitor, just enough active, that anyone who is really watching the window, will be interested - but not a giant display so those who are not really interested (but want to enter every contest) would notice. A small portable DVD player is perfect for this, with a short 1 minute video on perpetual repeat. inviting passers-by to join the contest.

Then two critical parts - number 1 - make sure you give the passer-by the chance to double his chances if the customer visits the store itself, before now and the date the prize is awarded. You want the visitors to come into the store and fill out a short survey (by mobile or on a touch screen simple interface at the store like an iPad for example). And of course, the prize has to be picked up in person, inside the store.

Every single store with a store-front at any street in any town should have a simple interactive tool to engage with passers-by for after-hours. No matter what you sell or offer, give the passers-by a chance to win something nice. Make it something different every month, don't run the same promotion in any way inside the store - you don't want to give away stuff to regular customers, this is a away to connect with those who did not make it inside your store. Nothing stops your regular customers from playing in the game too - but they have to 'notice' the window ad (and most regular visitors won't be bothering to look at your window displays).

And as the customers register to your contest, ask them if they will allow you to promote to them via the phone. This is the process you should be doing at all times, everywhere. Keep asking permission to have your customer signed up to your opt-in database. Remember McDonald's in Japan. You have to do this continously over years, to get a big database of your actual customers. When you get the permission, make sure you offer only relevant ads - I am a man, don't offer me discounts on womens' things, etc..

SURVEY YOUR ACTUAL CUSTOMERS

Then use the mobile channel as your occasional customer surveys. A couple of times per year, only to a small sample of your total opt-in database, ask them about your next changes to your store. You are considering expanding the X department and shrinking A, B or C, which would your current customers want you to shrink first. Or you are considering adding brands Y, Z and W, which brand would they want you to add to your store shelves, etc..

This is far more powerful than any marketing intelligence you can find in any trade journals or by any wholesalers' marketing materials etc. You get actual factual information from your actual customers. Their exact preferences. Ask for them, not often, in small amounts on a small sample, so never more than once per year per person. But imagine how much more this will increase the loyalty of your customers, if you ask their opinion - and obviously - after you have processed the survey - since you know who was asked - TELL THEM. Not everyone of your customers gets what they asked for. So tell EVERYONE who participated, what was the result. Now they feel they were listened to. Then tell them you'll implement preferences number 1 and 2 (this time..).. Those who voted for number 3 will fully understand - IF you tell them that 1 & 2 got more votes.. Far too often, after a brand asks a consumer for his/her opinion, they don't come back to tell the consumer what was the final tally. Tell your customers what was the final result. They will love you for sharing this.

Customer loyalty and CRM in the age of mobile is radically different from before mobile. It is very early days, but the wonder of mobile is that it is in the pockets of every economically viable person on the planet. If you are a retailer, the only way to talk to every one of your prospective customers is through mobile. This is new, it only became viable a few years ago. Remember, its not an iPhone App or any smartphone app that you want. You want to engage with SMS and a simple mobile web page built on WAP. Thats it. If you want to get creative, you add MMS and Java. That gets you to 80% of all phones of all consumers to the planet. Smartphones will not even reach a tenth of that, so any retailer should not give one penny to any app development of smartphones today. The start is SMS and WAP (and possibly voice and IVR). That is where you start. Then the second stage is MMS or Java (and in CDMA markets like the USA, Korea, Japan, China: Brew). You have to have these deployed before you even listen to someone who is excited about a 'cool' iPhone app for you. You are in retail, that means serving mass market consumers. You are not in the making cool apps business.

NOW IS THE TIME

But retail.. Now is the time to get to understand mobile. This blog had a few simple early examples. Remember, you can go into mobile at three separate stages of your consumer's consumption pattern. You can talk to the consumer before the purchase, advertise to the consumer. You can also talk to the consumer when they are in your store. And you can still engage with the consumer after they have left your store with their purchase. Mobile is the ultimate customer relationship device. Make powerful use if it now, before all of your rivals are doing it, and you will find a competitive advantage out of mobile.

If you want more info, you may want to look into my seventh book, first in ebook format, Tomi Ahonen Pearls Vol 1: Mobile Advertising. It is obviously primarily about the advertising (first stage) part of this opportunity, but that is where most retailers will need to start anyway. My ebook has 50 case studies of mobile marketing excellence the world over, and very highly rated as a practical book of what you can do today.

Is the 50 Billion mobile subscriber number feasible for this decade?

I have recently heard several times the number that the future of mobile/cellular connected devices will leap ten-fold from today, when we have 5 Billion mobile phone subscriptions to 50 Billion, usually expected to happen during this decade.

First, lets be very clear, in the past decade we did grow 10-fold in mobile (vs only 3-fold growth in the internet for example). And yes, I do believe in dramatic growth to come in mobile, so I am all for the expectations to be big. We will easily double from today's 5 Billion during this next decade, easily! We may be growing 3-fold or even more than that. But 10-fold in one decade? That does beg the question: is this feasible.

The planet has only 6.8 Billion people. So the 50 Billion number has to include lots of devices per person, as well as a lot of non-human connections, whether devices, household gadgets, cars, etc; as well as other living beings like pets, farmyard animals and even connecting other things like plants.

LETS START WITH HUMANS

Yes, so the biggest usable number we can start with, is the human population. 6.8 Billion people. In a very rough term, we can expect that the mobile phone subscription penetration rate globally will pass about 120% human population per capita during this decade (at least). That means that the world would match roughly what is normal in Europe today.  But that gets us only 8.2 Billion subscriptions. Nowhere near enough.

Ok, lets take the UAE example (this is Abu Dhabi, Dubai etc the oil-rich Emirates on the Arabian Peninsula). The UAE became the first country to pass 200% mobile phone subscriptions per capita. If we assume that to happen for the whole planet, that would get us to 13.6 Billion.

This is our biggest number and we do need to pump it as much as possible to get us to the 50 Billion. So 2 phones per person are not enough. Lets add in a laptop per person. Whether its a netbook or iPad or Kindle or a notebook, lets say the planet gets a laptop for every person - and by the end of the decade that will of course have a 3G or faster connection. 3 mobile subscriptions per person (not inconceivable, I for example walk around daily with 3 subscriptions, have done so since 2003). If we multiply the planet's population with 3 subscriptions we pass the 20 Billion mark, and arrive at 20.4 Billion. Thats a good start. Now lets turn to our car.

GROWTH RATE

What of the growth rate? The population of the planet keeps growing. Yes, thats true. But the population of the planet today is 6.8 Billion people in 2010. By definition, all new born humans between 2010 and 2020 will still be pre-teens by the end of the decade. All will be less than 10 years old, half will be 5 years old or younger. This is not the target market for new mobile phone subscriptions. A few of the 7-8-9 year olds perhaps, but thats not enough to push us far above current 6.8 Billion level, in particular that for those few of the eldest in this group, we then have to balance out those elderly people who will be dying in this decade. In terms of a viable 'mobile phone age' population, what is the total population of 6.8 Billion people today, can be seen to be the viable mobile phone aged population a decade from now.

CARS

So the car. We've heard the internet people like Google and Yahoo say that the next internet is mobile; and in the countries where the internet is already fully mobile (South Korea, Japan etc) they say the next internet is in the car. That will give us a nice boost to our count. Imagine one day when every car is connected. Roughly a quarter of all cars in South Korea are already connected to the internet.

Or will it? The world has under 1 Billion automobiles! If we assume one car-related subscription that comes with the new car when we buy it, to connect to the maps and security systems and self-diagnostics and on-board games etc - we only add 1 Billion mobile subscriptions to the planet. Thats not much when we consider our ambitious 50 Billion target. Funny to say that, one billion is not much...  But yes, adding cars, we're at 21.4 Billion so far.

Note, the car may have multiple subscriptions, as we may for example use our normal phone service, take out the SIM card from the phone and insert it into the car's SIM card slot. That would give the car 2 subscriptions (for a short duration) but then upon our person we'd go down from 3 subscriptions to 2, as one was temporarily assigned to the car. It would not add to the total. And for the car makers, it makes no sense to split their data traffic to many mobile operators, rather to accumulate their total traffic load and negotiate with all carriers/mobile operators to get the best bulk deal for the whole fleet of cars, on one network. So only one new SIM card per car.

CAMERA, PSP

So then we have the other stand-alone digital gadgets, like the advanced digital cameras by Canon, Nikon etc; or the portable gaming systems like the Nintendos and Playstatoin Portables. Lets connect these all to 3G networks. Sounds very plausible.

Except the numbers are trivially small, compared to mobile. The mobile industry sells 1.3 Billion new mobile phones every year (with a replacement cycle of 17 months). Stand-alone digital cameras sell 103 million per year (says Morgan Stanley in 2009). Similarly pocketable stand-alone gaming devices sell 48 million units. Portable multimedia players including DVD players sell 130 million. Pocket music players including the iPod sell about 127 million units (same source for all). These numbers are very very small. Even if we add them all together, we arrive at 408 million devices per year. Even if every one of them was now suddenly made 3G compatible with a mobile data subscription, in ten years of sales we'd only hit 4 Billion more connected devices. But we should assume growth, so lets double that number and we arrive at 8 Billion connected personal stand-alone (non mobile phone based) digital gadgets. Now our cumulative number hits 29.4 Billion. We are starting to get there..

WHAT OF THE HOME?

Ah, then the homes.. We can have our washing machine connected to the web (there are some that are sold already that offer internet connectivity). And the coffee maker. What else? The microwave oven? The fridge definitely. And the (intelligent) vacuum cleaner? The problem here is that we only have 1.7 Billion households on the planet. So while yes, we can probably imagine 4 or 5 household gadgets today that could easily imagine being connected, and another couple likely to come - most obviously the home robot (South Korea already has consumer-oriented household robot stores in major shopping malls). If we say 6 connected gadgets in the home, we'd arrive at 10.2 Billion more to add to our total. This is good, now we are at 39.6 Billion.

HOME METERING

We actually have another issue with the homes too. That is metering of our utilities. Water, electricity and gas metering. The modern way to do utilities metering is with a digital meter, connected wirelessly to the network. Lets say 2 utilities meters per household, and we add another 3.4 Billion connections and arrive at 43.0 Billion. We're almost there...

PETS

So next lets connect our pets. We have intelligent dog collars for hunting dogs for example, and the dogs-to-humans translator (Bowlingual) which translates dog sounds to SMS messages for humans of what the dog is trying to say. I have no idea how many household pets there are, but I think its safe to say, the proportion of pets is far less than the total number of households, even as some households may have more than one pet.

What number is reasonable, I don't know. Lets work on the upside and say, on average there is a pet in one third of all households (my guess is that the number is smaller but no doubt someone among our readers will know it). That gives us 560 million connected pets. With a bit of rounding off, we are now at 43.6 Billion.

FARMYARD ANIMALS

Then it starts to get difficult. What of farmyard animals? Yes, there are cows that are called to milk via an old mobile phone or beeper hanging on their neck, and when the cow hears the arrival of SMS (or the ringing of a phone call - no danger, the cow won't answer so there won't be billable calling traffic to the farmer) the cow knows to come home to be milked. Except that where cow herds can be big, cows are herding animals, so all the farmer needs to do, is connect the lead cow, and the others will follow. No, cows won't get us there. We may get some millions of connections, but this math won't even start to work until we look at billions, or at least major fractions of billions.

I am sure there are plenty of uses for near field connections for all sorts of sensors to enable something like digital farming, to identify animals, but those don't need cellular network connectivity. So I don't foresee SIM cards in chicken or pigs or sheep..

TREES

So then lets move from animals to plants. I've told the story of modern forestry management, where trees are tagged with devices containing GPS-GSM chips, for intelligent digital forest management. They can actually tag trees in forests of a million trees. But these gadgets are relatively expensive, and there is no point in paying for their cellular connectivity for the 20 to 30 year life that the tree spends growing to full size before it is felled. Again I am not a lumberjack but to me the clever way to use this technology is for some forest 'manager' to go tagging trees that need to be felled, with the intelligent GSM-GPS devices. But not to tag all trees, only those scheduled for the next round of cuts in the forest. And for the tagging devices to be recovered at the saw mill, and re-used. So for a forest of a million trees that has been managed well, so it has an even balance of trees of all ages, then about 5% of the trees reach maturity any one year. Thats only 50,000 trees to fell per year. If we split that by weeks, its 1,000 trees cut per week. I don't need 1 million SIM cards, I need 1,000. Maybe 2 or 3 thousand just to have some spare capacity, but not a million per forest.. Trees won't get us there either.

What of our plants at home? Yes, we have the clever plants-to-humans communications by AgriHouse of Japan who offer the humidity sensors to plants that send SMS messages to the owner saying when the plants need to be watered. If you have 20 plants in your home, and really want this level of technology to monitor each plant, yes, we could quickly pass 50 Billion subscriptions. But I do not foresee most homes having this technology. Yes, some will love it, but most not. And even those who will use it, will probably not need it for all plants. And the technology need not have a cellular connection, the more logical way of doing this is to coordinate with the home connectivity center (a home WiFi connection center and/or femtocell for example).

OK LETS TOSS IN MONEY

We are still about 6 Billion short of the magic 50 Billion number. Ok. Then lets go radical and say mobile banking. I am a firm believer in mobile banking and mobile money and payments. I am however, very well aware that the banking and money industry moves very slowly, is very conservative. It is not rushing to mobile. And there are many technical ways to do mobile payments and mobile banking and mobile wallets, which do not all require a separate subscription and/or additional SIM card.

But one of the preferred solutions is what for example was deployed in South Korea, where on the phone you have one SIM card for your telecoms needs, and a banking-specific SIM card for all your money needs including banking, payments, credit cards, loyalty cards etc. The one SIM cards is compatible with all South Korean banks and credit cards etc, so its just a question of a given bank or provider enabling their account onto your banking SIM card. And then if you need to move your banking services to a newer phone, you can do so simply by inserting the SIM card to your new phone.

So far so good. If we now assume all 6.8 Billion people on the planet get a mobile wallet/mobile banking service that adds yet one more SIM card, we do reach the 50 Billion number. But in all honesty, this won't happen to all people on the planet (kids for example) and definitely won't happen in one decade.

NUMBER CAN BE SEEN AS FEASIBLE

But is it plausible? We had some very severe assumptions there in that quick analysis. Assumptions that are quite deadly to the target number.

Lets start with the human 3 SIM card target. That could be seen to be reasonable for adult and employed populations. But teenagers and retired people? 3 SIM cards? Teenagers, Maybe. But the elderly? One mobile phone subscription, certainly. Two, maybe. Three? Unlikely for all of the elderly. In many cases a retired couple could get one iPad style device perhaps - to share among the pair. I think the 3 mobile subscriptions per person concept is not really viable for the whole global population. Not in this decade (yet)

Next lets go to the households. We thought that each household would have 6 connected gadgets. Well, actually that number is implausible because of the lack of electricity. 1.6 Billion people live without electricity according to CNN in 2008, so if we take the average household size of 4 people per household globally, thats 400 million households without electricity. No electricity, no clever digital household gadgets either. We just lost 2.4 Billion connections and a further 800 million metering connections.

Of the portable digital gadgets, with the 8 Billion number. That was a lot of smoke-and-mirrors. A cheap MP3 player won't gain from a 3G data connection - it would be a very sad rival to a musicphone but would add the monthly connection fee, while not offering telecoms connectivity (not being a phone). Not plausible. If the consumer wants to buy a stand-alone MP3 player, that will then have very particular music needs, and that person will definitely own a smartphone also, towards the second half of this decade. No, the MP3 players will not be networked on the cellular network (mostly. Some premium iPods probably will offer the connectivity but even those, mostly will not connect to the cellular, and will rather connect via WiFi).

The worse assumption is that all 8 Billion sold gadgets are still used by the end of 2020. While the replacement cycle for non-phone portable gadgets is longer than the replacement cycle for phones, certainly a significant fraction of the total cumulative sales of that number were replacement units, of better capability, sold to the same consumer. So we need to cut the 8 Billion number down by several billion..

Then we have issues with poverty, with illiteracy (800 million people of reading age are illiterate worldwide - illiterates will not need a laptop surely, and probably won't have much need of more than one phone in most cases), with wars, famines, and refugees. The victims of natural and man-made disasters will not be accumulating multiple IT devices..

50 BILLION IS NOT PLAUSIBLE

I do like visions of big growth numbers in mobile. I do like the bold predictions to suggest big growth, to counter those who peddle the tired myth that we are somehow at saturation or near saturation in mobile. I also like the guidance by the mobilists and futurists, who look at the past decade, observe that mobile grew 10-fold in that decade, faster than any other technology of significant size - and then to argue that the same rate of growth would continue this decade, another full decade of growth of 10-fold. And that kind of provocative argument does suggest those considering the market opportunity to also focus on who and what is to be connected, to understand we will run out of humans to connect, very soon, and the growth will need to be made from other devices and gadgets and pets and so forth.

But to me, the plausible number of mobile phone subscriptions for the end of this decade is somewhere in the 15 Billion to 30 Billion range, not in the 50 Billion range. I will be most happy to be proven wrong, but just please do take some sanity checks on the assumptions. Some of the fantasies and science fiction views are dramatic yes, but the numbers do not add up. Lets try to be realistic when giving guidance about the near future.

Convergence Contest? For the 5 Trillion dollar Trophy.

Vacations are good for fresh thinking. I started today's morning preparing to come back to work and my mind was buzzing with thoughts of the truly big picture. Last spring and summer I often got caught up with the minutiae of the percentage in market share or the next user number in text messages or the latest added consumers to mobile, etc. But there is a big picture to it all. The Contest for Convergence for the 5 Trillion Dollar Trophy.

To understand how enormous number we are looking at, its more than ten times bigger than the global computer industry including all PC hardware from desktops to laptops and netbooks and tablet PCs like the Kindle and iPad... plus the applications and software industry enabled by the PC industry. Take all that, and multiply that by ten! Or take television and radio, the total broadcast industry - and multiply it by 15. Or take the global internet and all its revenues out of Google adwords and broadband fees etc, all of the internet revenues - and multiply that by 20. We are looking at the biggest economic prize of our lifetimes, and it is 'in play' as we speak, with Fortune 500 giants like Nokia, Apple, Google, Hewlett-Packard, Vodafone, Microsoft, Sony, Samsung etc all angling to be one of the winners in this ultimate race of the decade, perhaps even the race of the century. So a quick review of where we stand.

I have been preaching the convergence story in each of my 9 books and was personally involved in the early stages of the digital convergence, from creating the world's first computer company advertisement to the internet (media and internet convergence) to leading the team that created the world's first fixed-mobile converged solution (fixed and mobile telecoms convergence) to authoring early documents on the future of convergence (at Nokia's Telephony Gateways digital convergence unit, I authored the first White Paper for the industry to discuss how to do the internet on mobile). That was all more than a decade ago when I was actively involved in 'doing it' rather than a consultant 'preaching it' haha...  But I do know quite a lot about the realities of digital convergence not only from studying the matter, but from doing it myself.

So its no surprise to my readers and fans, and readers at this blog, that I believe passionately in digital convergence. So lets not review my view. Lets see what some others have said about digital convergence 'recently' - say past few years.

COMPUTERS, MEDIA

The computer industry is headed to mobile. After Apple introduced the iPhone in 2007, and changed its name from Apple Computer to Apple, and now calls itself a mobile company, the bigger computer maker rivals have all joined the chorus. Now Dell, HP, Lenovo, Acer etc all sing of the same hymn book. The future of the computer industry is mobile. Maybe that is not a big surprise, they have been predicting the pocket computer for two decades already..

The media industries are more interesting. The (former) Director General of the BBC said that all broadcast content will be available on mobile (and BBC's successful iPlayer is a perfect example of how a broadcaster can take a big slice out of the digital convergence into mobile). The CEOs of the major media giants from Publicis to Warner Music to EMI have all started to sing 'future of media is mobile' stories. Publicis CEO Maurice Levy said that within a few years "most of the music", "most of the information" and "most of the advertising" will "transit through your cell phone."

WEB AND ADVERTISING

What of the internet? Good question. A few years ago there was a big battle of will the internet win or the mobile? Now it seems to be clear, it will be that the internet will converge onto the mobile. In fact, the future of the internet is mobile. Google CEO Eric Schmidt has been saying that for years already, and the new Google strategy, 'Mobile First' is a clear indication of how seriously they are taking it. And Google are not alone among internet giants believing in a mobile future. From 2007, Yahoo has been saying the same. So if you thought that perhaps the internet was threatening your business, that may be a short-lived threat, say for industries already feeling the full threat like bookstores or video rentals or music stores or travel agencies etc. If the internet itself is headed to mobile, the salvation for a bookseller or video or music or travel company is not to go online, it is to 'leapfrog' the technology gap and go directly to mobile. Like the book publishing industry is doing in Japan for example where mobile books outsell ebooks already.

Advertising goes where the media audiences go. Advertising has been on mobile phones for a decade already but in mostly small numbers and niche campaigns hidden in the digital ad budgets. That changed last year when the advertising industry woke up seriously to mobile. When the global ad budget declined, and all other forms of advertising shrunk in revenues, mobile advertising spending doubled worldwide. As I witnessed when I delivered my keynote to the Mobile Marketing Association global event in the meccha of advertising, Manhattan of the Mad Men of Madison Avenue haha, the big global ad agencies are all ramping up their competences in mobile, and I am witnessing it myself with far greater interest now in my mobile marketing workshops and seminars, such as delivering a keynote to the big MMA event in Sao Paulo this week. The global ad industry top management may be late to the mobile party, but they are dead serious about it now. As we learned from Universal McCann the advertising giant, one in seven media minutes is spent with mobile already today, as mobile is often the digital response channel for legacy media like television, radio, print etc. Voting for American Idol, that kind of experiences.

WHAT OF MONEY

So the telecoms industry itself is migrating to mobile, no surprise anymore this late in the game. The computer industry is going mobile. The internet is going mobile too. And the major media industries and advertising are headed to a pocket near you too. But thats not the full picture. I have said for many years now, that we have yet another 'dimension' in this race, of a major economic sector headed to mobile: Money. In practise, its banking and credit cards when considering the classic major financial industries, or digital money in a technical sense (insurance is also going to join the mobile revolution a bit later). The first two SMS-enabled vending machines were installed in Finland twelve years ago, and soon thereafter the first SMS-enabled parking was launched in Norway. We've had full mobile payment solutions in the Philippines for a decade already. Mobile credit cards are nearly as old. But the migration of money is very slow. We hear of some great successes - more than half of Helsinki area public transportation single tickes are sold via mobile, and all of parking in Estonia is mobile, and now more than half of all banking accounts in Kenya are mobile banking accounts. But its still tiny bits in small countries. Yes, about half of South Koreans and the Japanese have mobile digital money enabled phones and services, but its nowhere near yet where half of their economy would transit the phone, and they are the most advanced digitally converged nations.

In m-money it is very early going. Gartner told us that in 2009 there were 73 million people who used a mobile phone to make a payment. Informa counted that the world had  67 million people with a mobile banking account. Contrast that with the 2.1 Billion people with a banking account as reported by the BBC last year. If we want to measure the 'migration rate' then currently one third of one percent of all banking accounts have migrated to mobile. That is a very tiny fraction. But that was exactly how it was with smartphones vs personal computers in 2000, or how it was with the mobile internet users out of all internet users in 2002, or what it was with advetising in 2006. Less than one percent. Its easy for many in banking and credit cards to be fooled into thinking this tsunami wave of convergence will not hit their shores.

Yet in South Africa it is normal to get your paycheck paid directly to your mobile account. Norway was the first country to let you submit your tax return by mobile. South Korea was the first country to make 'cards' out of Credit Cards optional - all credit card services are automatically enabled onto your mobile phone (instantly when the credit is approved), and if you want, a free plastic traditional credit card can be mailed in a few days also to your home address - if you so desire. There is no need for plastic cards in South Korea, but you may travel to a less advanced country like say Germany or USA or Australia or France where they 'still use plastic credit cards' haha... In Japan the mobile wallet is the most advanced where it not just includes your banking and credit and payment and loyalty cards. It adds your keys to your home and car, the pass-keys to your office, your identity card, and now as the phone collects your payment behavior, they have launched the mobile consierge to the phone, to help manage your life. The users absolutely love it, suggesting the phone seems to read your mind..  And taking those lessons, Nokia launched Nokia Money in India and is enabling near field to all its new smartphones.

While the big banking execs are mostly blissfully ignorant, thinking that launching an iPhone App is tantamount to a mobile strategy, haha, the tsunami wave is well under way. So the migration has started. Sweden started this summer the first parliamentary discussions about when is the right time to abandon printing cash, and moving to a mobile money only digital money economy! They aren't about to do it any time soon, but they have started the serious discussion about the end of money as we knew it.

That covers the giant industries I want to mention in this blog today. Telecoms, broadcast and print media, advertising, computers, the internet, banking, credit cards. These are all industries whose size is above 200 Billion dollars annually - ie each is bigger than the total global handset business including smartphones and dumbphones and all phone based accessories like spare batteries and phone covers and memory cards etc (combined, is worth about 160 billion dollars in total - a small fraction of the 1.1 Trillion dollar mobile telecoms industry where the majority of the revenues come from mobile services like voice, SMS and premium mobile data services).

OTHER INDUSTRIES

There are many more industries, more small ones, that also are impacted by mobile, like cameras, music, videogaming, the watches and clocks industry etc, but those are so small (all under 100 billion dollars in size) that I won't spend much time on them now. They were involved in the first mobile battle of convergence, what I called the 'Battle for the Pocket' in my second book M-Profits in 2002.

There also are many other industries that are seeing impact from mobile, but who are unlikely to be totally cannibalized by mobile. So take air travel. Finnair launched the world's first mobile check-in in 2001 and today half of their passengers use the service. But mobile will not enable our air travel. We can't fly on the phone. We can book our seat and pay for the ticket and get a boarding pass to the phone, but we still need an airplane to burn jet fuel to fly from one airport to another. That isn't changing by mobile. So mobile can only influence a small part of the travel experience, whether in airplanes or hotels or trains etc. But in music, mobile can cannibalize all digital music. Same in the newsmedia or gaming or advertising or indeed money and banking and credit cards.

So yes, the automobile industry is eager to get into mobile too, many new cars feature SIM card slots for example and the next internet (after the internet has gone mobile) will be in cars. But again, if we need a car to get us from point A to point B, until they invent teleportation, we will keep needing that car (or some rival like a bicycle or bus etc). Mobile cannot cannibalize the whole car market like it can't cannibalize the air travel market or the hotel industry etc.

So this blog is about those industries that can expect far more than half of their total value, possibly the whole industry, to migrate to mobile in the coming years and decades. And that, if we take the dozen industries mentioned in this blog (excluding travel, cars, hotels etc) is worth a cool 5 Trillion dollars or about 9% of the total global economic spending of all economies on the planet.

HOW FAR HAVE WE COME?

So lets look a bit at how far we've migrated into mobile.

The telecoms industry is far along the way. 81% of the total telecoms industry has migrated from fixed landlines (0% in 1978) to mobile when counting total subscribers.

The internet had 0% mobile users in 1996. At the end of last year we reached mid-point, where half of all internet users accessed the web at least part of the time using a mobile phone (which includes the simple WAP type of mobile internet usage common in many parts of the Emerging World markets). So the internet has migrated 50% in 13 years.

Meanwhile there was no mobile phone that was a computer prior to 1997. There were stand-alone PDAs yes, but no advanced 'smartphone' to give computer like performance. Today all major PC makers have entered the smartphones battle and all say the future of the computer is the smartphone (something I have been saying for many years now). I counted on this blog that if we add both the traditional PCs including desktops and portable computers, and the smartphones, we get a total market size of 465 million units for 2009. Smartphone accounted for 37% of that amount last year. So we can say that in 13 years, mobile has already cannibalized over a third of the computer market.

Music was the first mobile content type in 1998 and today about 38% of all consumer music spending is mobile (when we include ringing tones). Videogaming followed and today a quarter of videogaming service revenues is generated on mobile. It would be an interesting market analysis to count all gaming-oriented smartphones (like the iPhone, most downloaded apps are games after all, the iPhone can be said to be the first globally successful gaming phone platform to rival the Nintendo and Playstation Portable..) and their value into the videogaming software value, the proportion would be bigger still.

I don't have a good measure for wristwatches and alarm clocks. But sufficient to say that clearly more than half of consumer uses of telling time - and of the wake-up alarm - is now from the mobile phone.

Of the big media industries like print, broadcast and the related advertising industries, their migration into mobile has only started and is in the low single digits in percent of total revenues or total content delivered. So these are all very early in the game.

And like I said, Banking and Credit Cards are at far under one percent of total users (and far far less than that in total value of the transactions going through mobile).

A LESSON

But I want to end on the 'lesson' for this blog. Cameras. The camera industry boldly and bravely (and foolishly) thought mobile phone based cameraphones would never catch on, and never rival their industry. That was a short-lived battle that was over in only 3 years. Sharp and J-Phone of Japan launched the world's first cameraphone in 2000. By 2003, more cameraphones were sold globally than all stand-alone digital cameras. By the next year, cameraphones alone outsold all types of stand-alone cameras (digital and film-based). Today cameraphones outsell stand-alone cameras by 10 to 1.

The camera industry correctly forecasted a dramatic growth in consumer adoption of digital cameras for this past decade. The growth was even better than they expected. But the growth was shifted from stand-alone digital cameras to cameraphones and the sales of stand-alone digital cameras stalled and stagnated. This is a common pattern in the 'Battle for the Pocket' as I have chronicled from the PDA vs Smartphone battle to the musicphone vs iPod battle, etc. Same pattern always. So what happened to the big four camera brands? In 2000 when the cameraphone was launched the world's biggest camera brands were  Canon, Konica, Minolta and Nikon, all out of Japan. Today only two of them continue making cameras, Canon and Nikon - which both quickly shifted their focus from consumer snapshot cameras to premium professional and semi-pro camera systems. Minolta and Konica have quit the camera business altogether. This is the decade of the biggest growth of consumer camera use ever, where the annual market for new digital camera purchases grew by more than 10 fold. It was the golden age of cameras, yet two of the big 4 failed to survive this enormous opportunity.

Same is true of the various other cameras-oriented industries like Kodak and Polaroid. The world's most sold camera brand is Nokia. The world's most sold branded camera optics are not Nikon or Canon branded lenses, they are Carl Zeiss optics, on many premium Nokia cameraphones. Of the total population on the planet, out of any person who has ever used any type of camera, for 9 out of 10 such users, the only type of camera they have ever used, is on some cameraphone. It may be difficult for older readers in the Western industrialized countries who see the long lines of cameras and accessories sold at the electronics stores, yet the numbers are perfectly clear.

So lessons. The cameraphone did not kill the stand-alone camera. It just took 90% of the market. For the mobile industry that was far more than 'enough'. The big phone makers like Nokia, Samsung, SonyEricsson and LG are not in the business of creating professional cameras. They can happily leave the small 'pro market' to the specialists like Nikon and Canon. But as the mass market vanished, the mass market business also shifted. Kodak, Minolta, Polaroid, Konica and so many other major camera industry players had to abandon the camera related business and shift to something else like professional imaging or scientific instrumentation or photocopiers or whatever, or else go bankrupt - like Polaroid has done, twice already.

If they had aggressively pursued the mobile market, either through a premium cameraphone or a specialist role in the ecosystem or in partnership - any of the big giants of cameras could have a major role in the mobile industry today. Look at Apple, a computer maker, who decided to do its music player (iPod) on a phone as the original featurephone iPhone 2G, and then decided to make it a full 'pocket computer' by the second release of the iPhone 3G as a real smartphone in 2008. They only sell 2% of the world's total mobile phone handset market today, but its such a huge market, that it powers the majority of Apple's revenues and the majority of Apple's profits.

That is what Lenovo wants now, as they launched their LePhone and sold 100,000 units in the first quarter. Its not as good as Apple did in 2007 but Lenovo is at least taking a stab at this market, rather than how the cameramakers hid their heads in the sand and tried to avoid the truth.

I counted that in 2006 there were 7 of the Fortune Global 500 biggest companies on the plant, who made a smartphone. These were essentially the big phone makers like Nokia, Motorola, etc. At the start of 2010, there were 23 companies that had either launched or were launching a smartphone, out of the Fortune Global 500. That made the smartphone space one of the most competitive of any industries on the planet, with probably more global giant rivals than any other industry ever in the same space. (At least when it comes to banking, most banks tend to operate regionally or nationally, with only a few global banking brands).

Note this growth was not that smaller 'newcomers' making smartphones had 'grown' into the Global 500. It meant that previous global giants of other industries had decided to enter the mobile space, like computer makers such as Apple and Dell, like internet giants like Google and Yahoo, like mobile operators/carriers like Vodafone and Hutchison, and softwre maker giant Microsoft etc. Obviously the year has not been kind in the over-competitive smartphones bloodbath (Google and Microsoft very visibly quit the smartphone handset business already, but both are increasing their software and services focus on mobile, so they have not abandoned the opportunity in digital convergence).

WHAT DOES CONVERGENCE ENABLE

Remember that converence gives us new opportunities of better experiences and as an industry, vast new opportunities. When you take a bookstore and put it online like Amazon, yes you can have some 'distribution' and 'warehousing' benefits and you can sell a larger catalog of book titles than the bricks-and-mortar bookstore down the street. But what of the reviews. What of my shopping history. What of others who liked that book. And personalized recommendations. Such abilities are impossible in traditional bookstores. In a small 'mom and pop' bookstore, if you were a loyal customer, you could perhaps gain the familiarity with the bookstore owner, to be able to get some recommendations. But that is rare and would take years of competence to develop by the bookstore owners, and still would not be nearly as powerful as the Amazon recommendation engine, in pinpointing exactly what kind of books I may like.

Look at Google. Before search engines, it was not practical to try to find 'all available information' on a given topic, unless you lived next door to a major library like the US Library of Congress and were a wiz at using the library's card catalog system - and then spend hours digging through book indexes and tables of content. It would still not be as thorough as any Google search today, and it would take years to learn the skills and days of research in the library. Yet a child of 6 can do the same within a fraction of a second on Google today.

The digital convergence enables fantastic new services and abilites we never could have imagined. Take airline seats today. What travel agent could have specialized in Hong Kong to Sao Paulo travel for me today. What price ticket would I have gotten, on what airline combination, and what miserable layaways on the travel connections? Yet we can go to Expedia or Travelocity or Opodo whatever travel site you want to use, and get to see dozens of flight options - and their prices - and their routes - and the actual aircraft used. Then we have seat guru, which will tell me what in-flight electricity options are on that class of seat on that specific aircraft type on that particular airline. A paper based traditional travel agent would never ever have that capacity, except perhaps for the few 'domestic' airlines that serve their home town. But I see that instantly for all airlines. We get vastly superior services for consumers when we seek opportunties out of digital services. And this is all before we start to enable my flight itself with mobile check-in, or the hotel does a mobile phone enabled locks to my hotel room etc.

WILL DISRUPT MORE THAN ENABLE

But it also often means cannibalization of the legacy services and their eco-systems. So take music. At the end of the previous decade, the majority of music sales was through the sale of music CDs. Artists would compile 'albums' of about 15 songs, sold at a price far greater than the one hit that currently made the artist popular on the charts. A huge support system was in the recording industry to produce the sound of the music, to produce the CDs, to ship them to music retail stores, and to use the radio stations, music video TV stations like MTV, and promotional concert tours to help promote the album sales.

Then came the internet, Napster, social networking, MySpace and YouTube. Almost all music became available on the net for free. The market changed drastically. The big music store chains started to fail and go out of business. The CD market shrunk sales year after year. But music didn't end. The market adjusted in two ways. The internet and digital enabled new ways for fans to discover their music and artists (MySpace, YouTube, social networking). Artists could still sell tickets at concerts, so they shifted more of their income from selling albums to concerts. And new digital formats emerged like the ringing tone and ringback tones, which now deliver a third of the total global consumer spending on music worldwide. The music industry was slow to get into this opportunity and there were many problems along the way - witness Crazy Frog. But consumers have not abandoned music. They still spend about 30 Billion dollars on it annually, only the traditional music publishing industry is getting an ever smaller slice of that.

So some skills are changed. The digital convergence brought powerful authoring and editing tools to any musician on their PC (and eventually increasingly also on their smartphone). That diminished - but did not eliminate - the role of the traditional music studio for creating music. Digital convergence changed music creation - the sampling of instruments popularized by the early 'synthesizer' music of the 1970s and 1980s has made it easier for an artist to 'master' multiple instruments. The mechanics of expert handling of a guitar or violin or piano is no longer as critical for the creation of music. It did not end the need for 'real musicians' ie playing at symphony orchestras etc, but it helped popularize music creation, by the masses, for the masses. Digital editing of sound has enabled errors in sound quality to be 'fixed' - ie some boy bands and girl bands may have members who don't have good singing voices (perhaps are better dancers or just pretty on stage ) that can be increasingly 'fixed' electronically. Again, that does not end the need for pure excellence in real singing - witness UK singing sensation Susan Boyle

What the digital convergence did, most of all, it dis-intermediated some players, and re-intermediated others. The 'talent scout' at recording companies (The Big Labels) is a job that is disappearing. That is nothing new, once there was a huge need of typing skills at major offices, typing pools, before the word processor and email made most of their typing work redundant. There was once a need for staffs of receptionists to answer phones, but voice mail took most of those jobs. Etc etc etc

We still have a need for real music and real musicians and real creative arists. The digital convergence may be making the difference between the average musician and superstar even greater - a Madonna or Rolling Stones can command astronomical fees, but the average starting rock band probably earns about the same per 'gig' per night, adjusted for inflation, as rock bands did in the time of the Beatles and Elvis 50 years ago.

HOW BIG WILL IT BE

I think we have enough evidence from early digital convergence to make some preliminary hypotheses.  We can assume that the legacy businesses, that do not embrace the digital convergence, to survive as a premium professional services industry but eventually fail the mass market. Thus they cannot sustain the number of players they have today. But that likely digital convergence will not kill most industries. These will be tiny niche industries, but can be profitable and sell to very passionate specialist customers, and those who specialize within the remaining industry but manage to capture the premium end of that market, can make a nice living in it. These would by definition become very stagnant mature markets sustaining only a few players.

A new converged economic opportunity emerges within the digital convergence which will not be as big, as the separate industries would be separately. So the cannibalization will eat into the size of the 'total pie' of the industries prior to convergence. But balanced against that shrinking of one pie, is the simultaneous growth of the total pie. So far up to now, the converged opportunity has always ended up far bigger than the initial industries that got into it.

When the battle for the pocket started a decade ago, the total value of all pocketable digital gadgets was about 100 Billion dollars in very rough terms. By the time the mobile phone had beaten the major rivals, PDAs, stand-alone cameras and musicphones, by 2006, the total pocketable gadget market had doubled to more than 200 Billion dollars in value, of which mobile had about three quarters. But most of what makes a modern mobile phone valuable to consumers is not the PDA or camera or music abilities of it. There are far more abilies and functions and services that game as additional growth areas, like mobile internet or MMS picture messaging or mobile payments and banking, etc. Our phone today is far more than 'just' a PDA-camera-music-phone.

The same happened in fixed-mobile convergence. The mobile did cannibalize some of the fixed telecoms revenues (and Skype probably took more of the fixed telecoms revenues than mobile) but today, the resulting combined telecoms industry is far bigger, about twice in size. Yet the opportunities did not come from just fixed telecoms services like local and long distance calls and voicemail, or those enabled on mobile. The mobile opportunity developed new abilities beyond convergence, starting from SMS and ringing tones more than a decade ago to augmented reality today.

THE BIG PRIZE 5 TRILLION DOLLARS

So that is what we are fighting for. The value of the different industries today headed for major cannibalization by mobile, where the majority of their business will end in mobile - is worth 5 Trillion dollars. Mobile alone is worth a bit more than one fifth of that, so there is far more from 'outsiders' to 'contribute' to this journey, than for the legacy mobile giants to do

It will be a big battle for this decade and for the banking and credit cards, that will last well into the next decade, but the convergence is inevitable. And do remember, this is not just about smartphone apps, or even about smartphones. Its about 'mobile' as the industry which is the ultimate convergence point and end-state for all digital convergence. That is what we are monitoring here on the Communities Dominate blog..

PS - if you'd like to read more, I have a few thoughts on the lessons of digital convergence up to now here, after the link

Whats Latest in Mobile Advertising, from MMA Global Event in New York City

I had the honor and privilege to present to the MMA Global event in New York City where I gave the first keynote of day 2. I was asked to present magical mobile marketing examples from around the world, featuring both sides of the Digital Divide (more about my presentation in chronological order here below).

As luck would have it, my flight arrived very early and I was able to join Day 1 nearly from the beginning. And I stayed for the full 2 days of the event, and made meticulous notes of all presentations. I was stunned to find at the end, that I had made more notes of this event - which indicates innovations and relevant updates - than any other event in mobile that I have ever attended before in my over 260 public speakerships in over 40 countries on all six inhabited continents. Noting that those include the biggest telecoms event of North America - the CTIA, the biggest telecoms event of Asia, CommunicAsia, the biggest telecoms event of Latin America, Andicom, and the biggest telecoms event in the world (and of Europe obviously) - the Mobile World Congress - this 2 day New York event arranged by the MMA was something quite exceptional. I promised to blog about what I had found noteworthy.

I also want to mention two very fascinating observations. First, that as mobile advertising is quite old as a concept - I chaired the world's first mobile advertising conference (held in London by the WAA the Wireless Advertising Association, which later merged to form part of the MMA) almost ten years ago - we've seen mobile advertising and marketing experience a slow growth through most of this decade. Certainly its innovations and revenues and market successes have been in the shadow of ringing tones and videogames and news and social networking until very recently. Mobile advertising for most of the past decade has not been particularly innovative. That has now changed radically, no doubt most of all propelled by the USA-driven global advertising industry, which was awoken only after 2007 when the iPhone hit the pockets of every self-respecting ad man and mad man (and -woman).

Secondly, one would be forgiven to assume, that a mobile advertising and marketing event held in the USA today, would be filled with iPhone Apps hysteria (the iSyndrome, as our friend Martin Wilson calls the mistaken notion that building an iPhone app translates into a mobile strategy haha...) and location based advertising hype. And that the American audience would not be offered a view into the true mass market reaches of SMS, MMS and WAP. Yes, one might think that. But this was an event arranged by the MMA, the Mobile Marketing Association. They are professionals. They know their stuff. And yes,  SMS, MMS and WAP were regularly mentioned, and even more reassuringly, many speakers emphasized the point, that while advertising clients (the 'brands') often requested iPhone apps in first meetings, the reality is today for MMA members, that even in the USA, they run mostly SMS, MMS and WAP solutions for most mobile advertising and marketing uses, and apps are - as they should be - a minor element for the premium smartphone segment where they can add value. And as to location based ads, there was very little mention of this other overhyped proposition.

I missed the first keynote of by Soledad O'Brien of CNN, and I walked in almost at the end of the second presentation by Mike Steib of Google. I don't have any notes from his presentation. But after that, I was there the rest of the event. Lets go in chronological order the most interesting items that I made notes of.  (I am not going to mention every item I observed.)

ESPN

The US sports broadcasting network ESPN had Sr VP of ESPN Mobile, John Zehr present. He told us about 'Citizen Scoring' ie as ESPN sends a TV crew to televise about 2,500 live games per year, there are another half a million live junior, amateur and youth league games of some sort. These don't get formal scores into the digital record of their sports. So ESPN has set up a platform to allow fans or supporters of these games and leagues and teams, to post the official records of these games. Thus when a future professional superstar emerges, we'll have a digital record of that star's junior career all the way to first public games etc... Clever, and very 'Communities Dominate' kind of thinking over at ESPN. John called it 'structured user-generated content'.

John also told us that Dunkin Donuts has run a campaign (similar to the Lays potato chips campaign in India) where customers of DD were asked to submit ideas for a new donut flavor. The suggestions were submitted via SMS of course.

MMA NORTH AMERICA

Jack Philbin who is co-chair of MMA North America, told the Track 2 audience that the Chicago Blackhawks mobile fan club (that I have discussed before) went from 25,000 fans to 75,000 fans in one year - and this was before the Hawks won its Stanley Cup, so today that number is likely even bigger - by the way, congrats to Finnish goalie Antti Niemi for becoming the first Finnish ice hockey goalie to get his name on the Stanley Cup, and the 8th Finnish hockey player across all time.

SYBASE 365

Sybase365 is the mobile arm of the database IT giant Sybase, that was just bought by SAP a few weeks ago. Cameron Franks the Sr Director at Sybase 365 presented in Track 2. He told of a really cool innovation by Rite Aid the pharmacy in the USA. They have regular plastic electronic card based loyalty cards like most major retail chains. But they have now allowed their loyalty card holders to register a cellphone number as the alternate loyalty card, and can use the phone numbers as their loyalty card, so they don't need to carry the plastic card in their wallets anymore (and have the loyalty card always with them obviously through the phone). This in itself is of course great utility to custmomers, but now Rite Aid can also send targeted messages via SMS such as offers and reminders if a prescription is running out, etc.

Cameron also told us of a Blockbusters UK video rental store campaign stats, that over 1 million rentals related coupons have been delivered (discounts, free drinks offers etc) and 100,000 of those have been redeemed ie conversion rate of 10%. Cameron pointed out that with paper coupons, all any company can do, is to validate the paper coupon itself (that it is not fraudulent) but with mobile coupons, of course the coupon itself can be validated, but so too can the customer using the coupon, be validated. Very powerful improvement over paper.

WEATHER CHANNEL

The Weather Channel has for many years had more total web usage in the USA coming from mobile users, than PC users. But now Cameron Clayton, the VP Mobile, gave us unique audience numbers which I think were very revealing. On TV, the Weather Channel gets a unique audience monthly of 119 million. On the PC, they get 42 million. On mobile they get 22 million. And on the iPad they have 520,000. Cameron also made a funny statement, that the Weather Channel is America's largest locatoin-based ad platform (obviously all weather forecasts they show is local ie typically TV will show weather for any city). He also said that their mobile use had 'struggled' until the iPhone came along, which 'changed everything' (haha, sounds like my original blog here before it launched, forecasting iPhone's future impact haha)

MTV

After lunch we had Salomon Masch the Director Mobile & Emerging Media for MTV. He said that while MTV has tons of video format content for mobile, 90% of all mobile advertising on MTV is WAP banner ads. He also told us that they have now adapted (MTV property) Comedy Central's The Daily Show with Jon Stewart - a 30 minute daily news parody show - into a daily 60 second mobile summary version. (I want that on my phone haha...)

ANHEUSER BUSCH

The US brewer of Budweiser beer, Anheuser Busch, had Todd Masinelli, the Sr Manager Digital, tell us about the Text Cruise to Beers contest, which is now in its 3rd year. Their Bud Light (light beer) brand has a text-to-win contest where they fill two cruise ships of contest winners on a monster party which ends on a private island with a surprise superstar rock band delivering a private rock concert. All the beer you ever wanted to drink on the cruise of course. Only way to get in, is if you text and win. They have a multi-platform campaign in all types of media, both nationally and locally where legally allowed, to drive Bud Light drinkers to try their luck in texting to win. The campaign runs from May 1 to December with continuous reminders and opportunities to reconnect with the brand along the way, while awaiting the announcement of the winners.

RG/A

The award-winning NY based global digital agency, RG/A (which I mention often in my books) had my friend Richard Ting, their VP & Executive Creative Director Mobile and Emerging Platforms, on a panel (I wish we'd have had a full presentation from Richard, his presentations are always worth their weight in gold). On the panel he responded to one question telling the audience that 2 years ago, RG/A had globally only 5 dedicated mobile specialists. Today their mobile competence has grown to 85 people. That to me is prefect evidence of how much increased attention the advertising and creative agencies are now focusing on mobile, and obviously reason why so much innovation is now happening in mobile advertising and marketing. Richard also said in another reply, that their clients often now know to ask for mobile, but don't know how to do mobile.

ISOBAR

Gene Keenan the VP of Mobile Strategy at Isobar, told of how they set up Adidas's campaign around the London Marathon. They offered all supporters of the runners, the chance to monitor the performance on mobile, plus to send personalized messages to digital billboards at given intervals at the marathon (ie any runner would see messages directed at them, correctly on time, when they approached the billboard). The total traffic yieded one half million SMS text messages during the London Marathon.

MMA BATTLE OF REGIONS

Then the event had a fantastic way to end Day 1, with a 'battle of the regions' where the Managing Directors of 3 regions of the MMA went head-to-head in a debate of whose region was best in mobile advertising and marketing. Michael Becker represented North America, Paul Berney Europe and Africa, and Rohit Dadwal Asia-Pacific. The audience (they had over 700 signed up to the event by the way, MMA's biggest event ever) voted using SMS. Each of the speakers had prepared short fact filled presentations for their regions, and we voted out one to give a final between two, and then saw more presentations for those, to then pick the winner (Paul won it). There were many really great stats and case examples that these 3 MMA veterans showed us, including several that are familiar to regular readers of this blog. I will only pick a few of my personal faves here.

In Turkey, Lipton Tea ran a campaign on ringback tones. Had 250,000 signed up. Grew Lipton sales by 47% (wow! Ringback tone advertising is VERY promising and Turkey has been an innovator in this space for a while now. Still, I was VERY impressed)

In the UK, the Ariel detergent brand had a campaign which hit 400,000 housewives using SMS and achieved a 20% response rate which generated footfall to the stores.

A TV ad (I think it was in the UK) for Wiskas cat food using SMS achieved 100,000 ads delivered and drove Wiskas sales up 30%

In South Africa, a florist chain named Sasko Flowers, ran an SMS campaign that resulted in 20% response rate.

That 'mosquito noises' campaign by Fanta that I have shown religiously for the past year as magical and fun, out of the UK, was revealed to have generated 600,000 downloads (cool, so there are about 1.2 million parents and several million teachers, who never hear those sounds while the kids play with their phones haha).

Our regular readers know intimately the award-winning BMW winter tyres MMS campaign with 30% conversion rate. I was happy to see it mentioned too, although I didn't learn anyting particular from that one haha..

The AXE virtual Wake-up girls, another of my faves right now, out of Japan, generated an increase of sales of AXE deodorant for young men, of 300%.

Out of India comes the 'Condom' ringing tone campaign, aiming to reduce Indian men's reluctance to use condoms, educate about contraception and AIDS awareness. The very funny campaign won CNN's award as best educational mobile campaign of the year, and drove condom awareness up 10% in India.

In Kenya its now possible to post savings to a funeral insurance account, via SMS.

And once again amazing milestone from Estonia - Estonia became the first country this year to allow citizens to post their tax return via SMS (don't we wish that was available in every country immediately? Ultracool) - Correction. A reader, Arild from Norway pointed ou t that Norway has offered this facility since 2003, so Estonia is no the world's first to do this.

The Puma F1 multiplayer racing game from China that I have often talked about has now usage stats - it achieved 200,000 downloads of the advergame, resulted in 300% increase in Puma sales in China, generated bonus interactions with the brand through ringing tones nad wall papers, and was so successful it forced rival Nike to react also on mobile in China.

TOMI T AHONEN - MY KEYNOTE

My keynote started Day 2. I gave 9 service examples across the digital divide, using my 8 Unique Abilities of Mobile as the framework for the case studies. As I have a tendency to do, I started first with some statistics such as that in India 33% of all messaging received by consumers is machine-originated, ie is media content, advertising, alerts or other marketing messages. I showed the stat that in Africa the average user looks at his or her mobile phone 82 times per day. And that in China of all paid newspaper circulations, paid mobile daily news updates on MMS and SMS have cannibalized 39% of the total paid readership.

I then used my line 'mobile is as different from the internet, as TV is from radio' and illustrated that when radio gave way to TV, all radio content was also replicated to TV, after which TV invented new formats you can't do on radio - like music videos - and that today TV revenues tower over those of radio. And that mobile will be exactly the same, it has already cannibalized all internet content in some way or another, it has already invented formats that are not viable on the web - like ringing tones - and that already today mobile data is bigger by revenues than total internet revenues.

Then I used the 8 Unique Benefits of mobile to showcase mobile advertising excellence, switching between the least advanced markets and the most advanced markets across the digital divide. For unique ability 1, personal, I mentioned the Australia stat that one in three spouces will spy on their partner's phone - and mostly do this while we are in the shower. My service example came from South Africa, the free Call Me service I have often talked about.

The second unique benefit of mobile is permanently connected. I quoted the UK stat that more than half sleep with the phone ringer left on, so SMS will literally reach us even in our sleep. My service example was the Guinness Sevens Rugby tournament app from Hong Kong, which includes game scores etc, includes tourist maps and of course bars serving Guinness, and that magical ability of the simple tourist translator, where the phone user clicks on an English phrase, and the phone speaks it in Cantonese - from take me to my hotel to may I have a Guinness to 'whats a pretty girl like you doing in a bar like this' haha... I also added my recent finding that this app increased Guinness beer sales by 25%

The third unique benefit is always carried. I quoted Finnair mobile check in stats that over half of fliers on short haul business routes now use the service. Then gave the example from Poland of the Knorr soups MMS based cooking guides, prepared by Poland's top TV chef.

Unique benefit number 4 is mobile payments as we know. I listed Kenya's latest number - that now their mobile banking accounts exceed traditional banking accounts (the first country to pass 50%). And as my service example, used the power of mobile to bring digital interactivity to non-interactive media, in the Coco Presso billboards campaign using NFC in Japan (where instant discount coupons can be redeemed at vending machines which are located literally next to the billboard advertising)

For unique benefit 5, creative impulse, I quoted that stunning UK youth stat, that 10% of british young adults think its ok to send SMS text messages while having sex (and for those who didn't know, obviously these young adults can all send SMS text messages single-handed and blind, so the phone may be behind the pillow for example haha). And my service example came from India with the Lay's potato chips campaign where India consumers were invited to submit ideas for new flavors. The four finalists are currently in test market after there were more than a million SMS text messaging based suggestions. The winner will get among other things, 1% revenue share of every bag of chips that new flavor will sell.

For unique benefit six, most accurate audience measurement, I quoted the AMF stats we know well here, mobile most accurate. My first example was Japan's Otetsudai networks (help wanted ads location-based service with full e-commerce etc). Then I showed the same concept can also thrive in simple tech markets, using Babajob from India where a similar service was deployed on SMS, WAP and IVR, and the addresses were manually entered by the prospective job seekers rather than automatically using the location data.

For the 7th unique benefit social context of consumption, I quoted the slightly older Jupiter stats that two thirds will try something recommended by a friend while also two thirds will forward something that they like. I used the Puma F1 race as my example - this was the only service example that I used of my nine, which had been mentioned by someone else during the two days. But I pointed out that when Rohit Dadwal of the MMA had shown the Puma F1 game, he talked of its user numbers. In my keynote, I focused on the viral aspects (social context) of the game which was also very clever.

For the 8th unique benefit, Augmented Reality, I quoted the stats on mobile virtual goods being worth 2B dollars this year, and mentioned Layar of course as the archetypal AR service. But for my AR service example, I showed the Adidas T-shirt campaign from Singapore, and illustrated to the audience how we've now moved from observational 'third person' AR to participatory 'first person' AR.

After the presentation (there was a sound glitch which caused me to run a bit over) there was the autographed book give-away of one copy of my latest hardcover book,Mobile as 7th of the Mass Media, and a rare print edition copy of Tomi Ahonen Pearls Vol 1: Mobile Advertising (it is only sold in ebook format). We ran an audience quiz of first, which country has the highest per-capita rate of mobile phones (UAE is the first country to pass 200% rate) and then where was TV-interactivity invented (the UK).

Of my presentation, based on Twitter commentary, the items that most struck the New York audience were the China 39% migration of newspapers to paid MMS/SMS news alerts, the 10% UK texting while having sex stat (of course haha) and that in India 33% of SMS is media content and/or advertising. Also the Q&A contest stat of UAE having 200% penetration rate got a lot of Twitter mentions. And I want to particularly thank Jeff Hasen, the CMO of Hip Cricket, who tweeted each of the 8 Unique abilities of mobile in its own Tweet with nice brief summary of that point and related facts.

ELECTRONIC ARTS

Returning to my notes, then we had Elizabeth Harz the Sr VP for Electronic Arts (better known simply as EA the world's biggest videogaming company). She told us that EA Games has already 50 games with a 'Lite' version, where the full capability total gaming experience is given for free on a game version that has only a few levels - those who want to play the full game will need to then buy the upgrade to the rest of the levels, or other such business models.

ALCATEL - LUCENT

Then my friend Thomas Labarthe the VP of Mobile Advertising for networking equipment makers Alcatel-Lucent, was kind enough to state that their mobile advertising platform was developed based on my book Mobile as 7th of the Mass Media (thank you so much Thomas!). He further kindly attributed to me my thought that in mobile we are witnessing the third evolution of mobile advertising, the first was copying existing formats from legacy media, the second is the current interactive advertising, and the new, mostly still emerging wave, is engagement marketing.

Thomas talked of the need to have clear opt in, to be transparent to end users, and to have clear and simple opt-out options. He said something also very perceptive as we ponder 'who owns the customer' haha, Thomas said 'the customer owns the customer.'

BLYK

Then we broke into streams again. I was in Stream 2, where our dear friend Antti Ohrling, the co-founder of Blyk was on a panel. (I would compain bitterly of this injustice, as Antti has forgotten more about mobile advertising than the rest of us have learned. Yes, normally Antti Ohrling should be doing a keynote of course. Except that Antti was actually used to run a workshop before the conference, so those who wanted, had received a lot of Antti's insights.) Antti told the room that in mobile the need for privacy increases 10-fold. He said traditional media had been living in a static model of segmentation, but in mobile we have dynamic segmentation ie our behavior can easily change in very short cycles, - it is possible for one person to exhibit alternate behavior several times per day, being a business professional, then a parent etc in the same day. Antti also told of a banking case in the UK without naming the actual bank, obviously, who had used Blyk to target youth first time bank accounts. When they ran their first campaign, the response was so enormous, that the bank's calling centre crashed..

COCA COLA

Then Coke's Tara Scarlett, Sr Manager CRM, told us that the consumer today has 3 times more choice in convenience store branded items than just 30 years ago. We are now facing hyperchoice. She also told of the Coke SMS campaign of Twist, Text and Win. It was supported across multiple platforms and media, but the purpose was to drive sales of Coca Cola bottles, where under the bottle top, there was an SMS code to win prizes.

CDC

The Centers for Disease Control had sent Holli Seitz, the Presidential Management Fellow to tell us about their pilot project in mobile which they now are expanding. I particularly noted the stats that even on such a sensitive issue as the government asking for personal data related to our health, 70% of their registered users, were willing to take a 3 question survey on the phone, asking for their age, their sex and their zip code. (obviously data which is very relevant to diseases..)

KODAK

Finally we had the CMO of Kodak, and bestselling author Jeffrey Hayzlett give a most dynamic and energetic and funny and emotional final keynote, based loosely around his book, The Mirror Test. Jeffrey said that photographs were the kind of property that regular consumers will run into a burning building to save. He also mentioned - very Communities Dominate haha - that the value of pictures increases when they are shared.

Ok, that was the best highlights of the MMA Global conference in New York. If they release a video of my presentation, I will blog about it and add the link also here of course. Thank you MMA for a truly wonderful event with a fantastic lineup of excellent speakers. I had a wonderful time.

Everything you ever wanted to know about mobile, but were afraid to ask

The Myths and Misconceptions of Mobile

This is a primer about mobile, but in particular it is written to those who are relatively new to mobile (or 'cellular phones' if you are familiar with the American terminology). It is intended to provide answers to many of the basic questions, about the iPhone and apps, about the internet on phones, about media and advertising on mobile, about email and SMS text messaging, etc. I will address these issues from the basics, with the facts, and exposing some widely-held myths along the way. And please note, this is a blog article, a 'primer' which intends to do truly 'everything you ever wanted to know about mobile' to cover all of the most important points now, in 2010. So this is not going to be short. Get yourself a cup of coffee, this will be a journey. But I promise you, if you're new to mobile, you will learn a lot in this article, most of all, I will address many myths to help you avoid common misconceptions.

EVERYONE DOES MOBILE?

So, in the past few years we've heard the world's biggest internet company, Google, say the future of the internet is mobile. We've heard the world's biggest software maker, Microsoft, take the leap from just providing software to cellphones, now they have become a cellphone maker as well. We've heard the world's largest PC maker, Hewlett-Packard announce they believe in the mobile future so much, they bought the smartphone maker Palm. The BBC said a while ago that all TV and broadcast content will be available on mobile (since then, the BBC released their integrated i-Player which has won big awards for allowing media consumption on a phone). Airlines from Lufthansa to Japan Airlines to American Airlines are deploying mobile phone based check-in solutions. Carmakers now say that the internet will come to cars - via the cellular ie mobile telecoms network. Ever since BMW introduced the first car with a SIM-card slot, you could say that BMW's cars were the world's largest mobile phones. What have I forgotten? Oh, banking. Today 49% of all banking accounts in Kenya are mobile phone banking accounts, and more than half of the South Korean population already use credit cards or mobile payments on their phones.

RADIO AND THE SEVEN DWARFS

Where did this all come from? It sure came in a hurry. Lets put mobile into context. A decade ago, there were roughly speaking seven globally adopted technologies of roughly similar size, of between 500 million and 900 million users on the planet. That was global size of television sets, of personal computers, of fixed landline phones, of internet users, of credit cards, of automobiles and of mobile phones. And there was one giant, FM radio which was the giant at roughly 3 billion users. Technologically one could say it was the time of FM Radio and the seven dwarfs. So if you had the impression that 'mobile is just one of several technologies, roughly as important as the internet or PC or TV or the landline phone' - that was a perfectly valid and factually correct view, until quite recently.

What happened. In the past decade, fixed landlines grew mildly, reached a peak, and turned into decline. At its peak there were about 1.25 billion landline phones on the planet, and today its down to about 1.15 billion. For example one quarter of US homes has abandoned the fixed landline as redundant (because all family members have cellphones) according to the FCC. This is no surprise, its a universal trend, first observed in Finland in 1998, and in Finland today over 60% of all homes that once had a landline phone have abandoned it. Oh, Finland went so far, as to find the payphone redundant too, they decommissioned payphones more than a year ago (something that is increasingly happening also around the world).

The PC population grew strongly, roughly speaking doubled and passed the billion user number in 2007. Today there are about 1.4 Billion PCs of any kind in use, including desktops, laptops, notebooks, netbooks and tablet computers (like the Kindle and iPad) all put together. Yes, a big number.

The internet user number was smaller than the population of PCs a decade ago. That reversed, today there are more internet users than total population of PCs. How did this happen? Its because some users share PCs, such as a family shared PC for the kids, or a university PC lab, or an internet cafe; and of course because of the rapidly growing trend of accessing the internet on a phone. The number of internet users today is about 1.7 billion people.

Television kept growing as well, roughly speaking doubling in total worldwide audience, and today there is a TV set in about 1.6 billion homes. The number of credit cards also roughly speaking doubled, and today there are about 1.5 billion unique holders of credit cards. And while its far more expensive than any of the rest in this list, the number of automobiles nearly doubled in the past decade, and today there are about 920 million registered automobiles in use in the world.

Oh, and what of FM radios? They kept growing also in numbers, and tower over these others, where the world has about 3.9 billion FM radios in use today.

ONLY UBIQUITOUS TECHNOLOGY

So that is our context. Each of the giant technologies grew, some modestly like fixed landlines and FM radios, most of them doubled in size like TVs, PCs and the internet. What of mobile? At the start of the year 2000, there were about 500 million mobile phone subscriptions on the planet. Then the number exploded. There were already more mobile accounts than internet users, cars or personal computers. By 2002 the number of mobile phone accounts grew past fixed landlines. By 2003 it shot past TV sets. By 2004 we had more mobile phones than credit cards. And FM radios? By 2008 the world passed the point where there were more mobile phones than FM radios on the planet. The mobile has become the most widely used technology on the planet. And mobile did it only in the past decade. Note, where most of its rival 'hot' technologies like the internet and PCs and TVs roughly speaking doubled in size over the past ten years, mobile phone subscriptions grew almost ten-fold. At the start of this year we had 4.6 Billion mobile phone subscriptions on the planet, for a population of 6.8 Billion people. That is literally a mobile phone subscription for two out of every three people on the planet.

I want to make this point. All other major technologies that were roughly of the same size, TV, PC, internet etc - grew roughly speaking to double over one decade. Doubled in ten years. Mobile started roughly of same size but grew nearly to ten times its size in the same decade. They started as more-or-less equals, today mobile towers over all others.

And do remember, that is global numbers. Two thirds of the planet means we now cover people who are refugees from wars, living in poverty etc. On the planet there are 800 million people of reading age who are illiterate, 1.6 billion people live beyond the reach of electricity, and 900 million are children under the age of 7. There are more people with mobile phones than have access to running water. More mobile phone subscribers on the planet than use a toothbrush (its true!). Yet even across all these hardships, the mobile has spread so rapidly that there was a mobile phone for two thirds of the planet at the start of this year, and will be 75% of planet Earth's population by the end of this year.

There has never been any technology that has even remotely been this widely spread. Remember those FM radios? They are not evenly spread on the planet. In the 'West' ie the Industrialized World, we have on average 2.2 FM radios per capita. In the 'Emerging World' they share five people to one FM radio, on average. But even on the least affluent of the inhabited continents, Africa, the penetration rate of mobile phones has passed the 50% level.

So if you didn't know mobile, there is a good reason for it. Until very recently, it was 'just another technology' and as a pocketable gadget, it could easily be dismissed as just another in the series of the iPod and PlayStation Portable and the digital camera and the GPS device and portable DVD player etc.

SO ITS OBVIOUSLY STILL PRIMARILY A PHONE?

So we examine a new phenomenon from a perspective that we know. A 'mobile phone' is still a phone, isn't it? So its primary use is to initiate and receive phone calls? Yeah, that sounds very reasonable. Its called a phone for good reason, eh? But no. That was true yes a decade ago, but today all over the planet, the primary use of a mobile phone is to use a far more efficient form of communications - SMS text messaging. In most markets the total outbound traffic from mobile phones has shifted away from being voice calls, to being SMS text messages. Even the USA found this trend about a year ago. Its been observed in many Asian and European countries for most of the past decade. And yes, its not a 'youth only' trend. Lightspeed Research reported that in 2009 already 13% of global mobile phone owners have stopped placing any outbound calls on their phones (in India its already at 30%). Its time we stop thinking of it as a mobile 'phone' (or cellphone) - I am trying to learn to use the term 'mobile' by itself as more descriptive and relevant.

The primary purpose of a mobile phone is no longer voice calls. If you find that hard to believe, then you are probably old enough to remember fax. Remember the first time someone suggested that in the future the majority of written communication would be done with email, not fax. You felt that was preposterous, because email was so informal and there was no elegance of the written page, the logos we had in our corporate stationary, you couldn't do a 'proper' signature in email, etc. That email was perhaps acceptable for the youth in their casual communciations, but not suited for the CEO of the company to write proper correspondence to another CEO. Obviously that time has passed and today all business uses email in formal communications and very few remaining industries and uses still require fax confirmations for things such as contract signatures.

But please you don't have to accept my argument on this. The fact that the total population prefers SMS to making voice calls has been verified by the UK telecoms regulator for Britain, the Irish regulator for Ireland, similarly for New Zealand, the USA etc. Literally globally, the evidence is in. I am not arguing that this will be so, it has been already proven to be so. For the majority of mobile phone owners, their primary use of the phone is no longer voice calls, it is SMS text messaging. That is a fact. Which probably is a 'wake-up call' for many reading this blog. Wow, SMS text messaging, really? I hadn't thought of that...

SMS VS EMAIL

So then the natural assumption for many is to look around, see the Blackberries and iPhones in use, and think, ok, I can see SMS is the hot thing now, but that will clearly pass and wireless email will soon be the predominant way to communicate on the phones. Yeah, that sounds reasonable but its not going to happen. Just like so much in mobile, this industry is baffling and counter-intuitive. Certainly email on mobile is one of those many myths.

We have had email on premium phones, not just smartphones but many mid-priced 'feature phones' for more than a decade. The Blackberry has been around for almost a decade itself (launched in 2001). If email was going to give SMS a run for its money, we should have seen some evidence of it by now. But the opposite happened. Those older people who had not been active users of SMS, who started to use an email-friendly phone like a Blackberry, would often indeed migrate much of their email traffic away from the PC to the phone. But then two things happen - those who still use email, tend to start to exhibit 'SMS-like' behavior in their emails - often sending the whole email reply written in the headline of the email (with no content in the email itself) so email behavior when using a phone is shrinking to mimick SMS. And far more often, Blackberry users discover that while most of their messaging counterparts are not at a suitable email device 24 hours a day, they all can be reached via SMS.

The New Zealand Herald reported just this April, that the latest statistics from that country find that a typical email is opened within 48 hours, but an SMS is read within 4 minutes. That means, that a typical SMS is 720 times faster than email. Oh, and these stats are totally in line with similar measurements done by the industry all around the world for many years now. Yes, you can use the ultra-slow messaging (email) or hyper-fast messaging (SMS). How many times do you need to 'experiment' with SMS to notice a speed difference of 720X faster speed. Its like comparing the speed of crossing the Atlantic in a sailship taking three weeks, or in the Concorde doing it in 3 hours. No, sorry, even thats not fast enough. You'd need to get across the Atlantic in less than an hour for this analogy to be approximately right.

And that was 'older users' who had learned email first. Even older users now find the speed of SMS intoxicating and migrate to it. What of young users? Globally, from survey after survey after survey, UK, France, South Korea, USA - youth the world over agree, that email is for old fogies. They prefer SMS. eMail is barely growing in users but SMS has 3 times more active users. No, its true you can do wireless email on a Blackberry or Nokia E-Series or iPhone - but thats not the future of mobile messaging. eMail, even wireless email, is past its prime, and the future of messaging is definitely SMS - which keeps growing by leaps and bounds, year after year, in every country of the planet.

MOST WIDELY USED DATA APPLICATION

So we need a few significant points about SMS, the most widely used data application on the planet. We just heard from Clickatell earlier this year that the world is passing the 4 billion active user number for SMS. Do remember, that all internet users number 1.7 billion and not all of those are active users of email. Facebook, Twitter, YouTube, MySpace etc are tiny fractions of that number. But SMS text messaging is used by 4 billion people and reaches the pockets of 58% of the planet.

So newspapers? Eight times more people pay to send SMS text messages than pick up a daily newspaper, whether paid or free circulation. More than four times as many people send SMS text messages than have a car. Two and a half times more people send texts on their phones than own a TV set, or own a PC, or have a credit card. More than twice as many people send SMS than have access to the internet, and yes, more people communicate with their friends via SMS, than own an FM radio.

SMS is the magical way for any other media or technology to create an interactive experience with their customers or audiences or constituents or patients or however they consider their users. SMS text messages earn TV shows like American Idol bonus income, the latest USA run of American Idol generated about 100 million dollars worth of televotes. This is income above and beyond the high ratings and the TV ad revenues that the 'Pop Idols' TV format tends to generate in almost all TV markets where it has run.

SMS is used by libraries to send reminders to patrons that their books are due to be returned. Text messages are used by dentists to reschedule cancelled appointments. SMS is used to inform car owners when their car is ready to be picked up from the garage. Texting is a powerful way to deliver coupons, discounts, tickets, balance statements etc. The Helsinki public transportation system has more than half of all single tickets to the trams and subway sold via SMS. Finnair reports that half of the passengers on its short-haul flights of its popular routes now use SMS based check-in. Juniper measured that in 2010 a total of 2 billion mobile tickets of some kind including movies, travel, etc will be delivered worldwide.

SMS was used to send charitable contributions to the victims in Haiti. And Estonia became the first country to migrate one (tiny) part of its economy past coins and cash, to a mobile-only payment world. Today in Estonia you cannot pay for parking by using cash or a credit card - the only way to pay is by mobile phone, using SMS. And in India, out of every 3 SMS messages received by a mobile phone owner, one out of the 3 is some kind of machine-originated content, typically media content or some other customer service or marketing message, according to the Indian Telecoms Regulator.

MMS IS NEXT

So SMS active user base is now at 4 Billion, and even the Americans have fallen in love with SMS (two thirds of American cellphone users are active users - GfK reported it as 64% of all US cellphone owners in 2009). What is the next big thing? Its not smartphone apps and its not the real internet on phones. Its MMS. You may think of MMS as a clumsy, expensive and unreliable picture-sharing system, which results in poor-quality images when received, if received, whenever that happens or not - but regardless they'll charge you an arm and a leg to send the pictures. And email is free, so any 'intelligent' person would use email attachment to even send pictures from one phone to another right?

Fine, lets leave that point to one side. MMS is not a picture messaging platform (else it would be called PMS, Picture Messaging System). MMS is a Multimedia Messaging System. Yes, multimedia includes text, includes sounds, includes pictures and includes video. Video content. You could send short clips of stories via MMS. Or a series of pictures (like a cartoon) via MMS. And sounds yes, plus longer text based messages than in SMS.

Now lets think a bit more. 4 Billion people on the planet already send SMS text messages, so they know fully well how to read an incoming SMS. Then MMS, is designed to be the next type of messaging, very similar. Anyone who knows how to read an SMS, knows also how to receive or 'open' an MMS. And how many people have a phone and network capable of receiving MMS? 2.9 Billion people, thats who. More than twice the global number of personal computers, and almost twice the number of TV sets, the only other globally prevalent mass media devices that can do multimedia. MMS is the worlds most widest-reaching multimedia platform. Its a media industry's dream. It has all the benefits of SMS, but it breaks through the 160 character limit, and allows pictures, sounds and videos. This is the ultimate couponing, advertising, music and TV and movie and gaming -related media platform. The ultimate.

Yes, the price is more per message obviously than SMS. Yes, there are still many teething problems, not all phones support it (the early iPhone did not) and often the user has not enabled the right settings for MMS on their phones. There are still many interconnect problems between mobile operators/carriers. But these are just teething problems that are being fixed. Look at the numbers. The value of MMS this year is 31 Billion dollars according to Portio Research, or 32 Billion dollars according to Research & Markets. My TomiAhonen Almanac 2010 reports that last year MMS revenues were worth 29 Billion dollars, and the active user base was 1.7 billion people or 37% of all mobile phone subscribers on the planet.

This is huge. MMS alone is bigger than the global music industry, and this year is passing the global movie industry box office revenues in total value. MMS is a magnificent platform to deliver compelling but still very simple multimedia experiences to end-users. TV shows send MMS based 'minisodes' to loyal viewers - for example soap operas send short previews of tomorrow's episode, that are available right after today's episode has ended. These cost typically from 50 cents to about a dollar per MMS episode and make tons of extra money to TV broadcasters. In China all major newspapers offer a twice-daily MMS 'breaking news' service, and 40% of their readers have already signed up to these services. MMS also delivered one of the world's most impressive mobile ad campaign for BMW in Germany. Experts in 'engagement marketing' such as Jonathan MacDonald, David Cushman and my co-author of Communites Dominate Brands, who coined the term engagement marketing,Alan Moore - say that MMS is particularly suited as an engagement marketing platform.

So who cares if MMS is used to share pictures (it is used that way as well, mostly by young users). That is not its best ability. MMS is the almost perfectly media-focused messaging platform, the ideal advertising and media content delivery mechanism. And its active user base at 1.7 Billion people is more than all internet users, all PCs in use, and all TVs in use. And you thought it was a stupid picture messaging concept? Yeah. 84% of the population of Norway are already active users of MMS said TNS Gallup last year, in the UK the usage has passed 62% according to Aenas in 2009. Even in the USA the MMS usage level has passed 40% according to Jagtag 2009. If you ever thought, "I like SMS but I wish it could do a bit more" - then MMS is made for you. Just don't think its only picture messaging. Over 30 Billion dollars in revenues this year.. this is huge.

THE UTILITY OF ANY ACTIVITY INCREASES WITH ITS MOBILITY

But my laptop is 'mobile' as is my iPod or the new iPad. Are these not also part of the mobile industry? There is indeed a very good 'law' invented by Sprint's Rich McGuire, called McGuire's Law, which states that the utility of any activity, increases with its mobility. It is why the PC industry now sells more laptop style PCs than desktop PCs. And yes, we could say McGuire's Law applies to our cars, to our boats, to tanks in the army (mobile fortified gun emplacements) etc. And as we add more mobility, we get more utility - a motorcycle can take us far further in a day than a bicycle, etc. His law is not specific to only computing and telecoms. The law does not however, explain what happens with the pocketable devices which tend to have roughly the same level of 'mobility'.

So if we compare a PSP to an iPod to a stand-alone digital camera to a mobile phone. PSPs and Nintendo Gameboy pocket gaming devices sell about 50 million units annually. iPod and all other music-playing MP3 players total about 130 million units sold annually (Apple iPods form about 50 million of those globally, selling very well in the North American market but poorly in the rest of the world). Stand-alone digital cameras sell about 100 million units annually. Digital camcorders sell under 15 million units per year and stand-alone GPS devices sell about 50 million units per year worldwide. Thats our landscape. If we add these all together, excluding mobile phones, the rest of the most popular pocketable digital devices sell a combined 345 million units per year around the world. Mobile phones sell 1.25 Billion units - literally 3.6 times more than all of those devices added together.

McGuire's Law does not help us understand why music-playing mobile phones outsell MP3 players like the iPod at 6 to 1. Or cameraphones outsell stand-alone digital cameras at over 8 to 1. We need more insights, which is why I developed my 'Ringing in the Pocket Test'.

ONLY MOBILE WILL RING IN OUR POCKET

And early on in the past decade when we were trying to understand the addiction that consumers were exhibiting towards the mobile phone, we noticed that increasingly the single most important gadget for consumers is the mobile phone. That yes, they abandoned landlines in favor of the mobile phone. That some heavy users of email would abandon the laptop when they received a good email experience on their phone (ie the Blackberry). That music consumers were abandoning the iconic Apple iPod, for all its excellence in music consumption - in favor of much simpler SonyEricsson Walkman musicphones. This was so contentious a point, that when I first argued it was happening, we were almost crucified here on this blog, but later Apple CFO openly admitted that the Apple iPhone was rushed into the market, explicitly because musicphones like the Walkman phones, were cannibalizing iPod music player sales. And of the big 4 camera makers, Canon, Konica, Minolta and Nikon, the cameraphone revolution was so severe this past decade, that two of the four giants, Minolta and Konica, have quit making cameras altogether - because of cameraphones.

Something is happening here. One could say that it is universally true, that a 'compromise' device like a mobile phone with a camera, or mobile phone with MP3 player, or mobile phone with the internet, etc, will be inferior to a dedicated device. Yet mobile phones sell up to 10 times more in annual units, than these dedicated specialist devices. Why is that? So we found that there is something we coined in Finland as 'Tavoitettavuus' (Reachability) and I wrote about it from my second book, M-Profits in 2002. Studying Reachability, I have since come up with a simple test, and a good explanation.

We do not insist on carrying our phone everywhere because we feel a need we have to call someone (or send a message to someone). We carry the phone 'just in case' if someone needs to contact us. This is 'reachability'. We don't want to miss that important call or contact. Thus the device has to fulfill the 'ringing in the pocket test'. IT needs to be small enough to fit into our pocket
9and iPad for example is way too big) and it needs to be permanently connected so that it is able to ring in our pocket. Now lets go back to the cameras. A cameraphone of similar cost, will be far inferior to the camera functionality of a stand-alone digital camera. If we are wealthy and can afford the devices, and if cameras are important to us, we'll of course get a 'proper' modern Canon or Nikon digital camera, probably with plenty of accessories, like a tri-pod, a flash unit, some inter-changeable lenses, etc. And for such users, they tend to think of the camera on the phone often as too poor in quality, to even consider using.

That is only for the wealthy and the camera geeks. For 9 out of 10 people on the planet, who have ever taken one picture, the only camera they have ever touched, has been a cameraphone. The world's best-selling camera brands has since 2004 been Nokia. And ex Nokia designer Christian Lindholm, now of Fjord, says the best camera is the one you have with you. An expensive SLR style professional Canon system is of no use if you need to take the picture now, after that idiot drove his car into yours and you need to take pictures of the accident as evidence that it was not your fault, and you left the Canon camera at home. Then even if your cameraphone 'only' has a 2 megapixel simple camera with no autofocus and no flash, taking that picture is better than nothing.

That is the point. We carry our phone because we know instinctively that something may happen, and we need to be 'able to be reached'. Maybe there is an emergency, maybe a change to plans, etc. And only a phone can "ring in our pocket". The laptop cannot wake up from its sleep mode, and suddenly warn us, that there is someone on Skype who wants to talk to us urgently. That urgent email cannot reach our notebook or netbook PC if we are not in WiFi coverage. But the call or the SMS message will reach our pocket every time, almost anywhere on the planet. Then it means, that when compared to any other pocketable device, we will prefer the phone. And even if the 'functionality' of the phone for music or pictures or internet surfing is worse than the stand-alone gadget, if the phone is the only thing we have, that gets the emergency usage.

That is why I say, you start with McGuire's Law, and then you apply Tomi's Ringing in the Pocket Test. That tells you whether the Kindle or iPad or whatever gadget will sell in the millions or in the billions. And to prove my point, ChaCha surveyed 1,500 US teenagers this year, and found that if forced to pick one technology over the others, 61% picked their mobile phone vs 18% picking the computer, 11% picking the TV set. And of all that hype about Facebook and youth instant messaging, the same survey revealed that if forced to pick their fave messaging method, 68% of US teens pick SMS text messaging, vs 10% voice calls, 9% Facebook and 3% picked instant messaging. (and 0.3% - one third of one percent - picked email).

REACHES IN OUR SLEEP

The mobile phone is a radical new technology of completely unprecedented reach and power. It has been proven to be addictive in university studies from Belgium to Australia. SMS text messaging was proven to be as addictive as cigarette smoking. The phone is so personal that we don't share our phones with our wives or husbands, and teenagers won't let parents snoop inside their phones. But thats all old news to those who have been in this business for a long while.

Now for some of the more revealing recent findings. New phone models in Japan - the world's most advanced mobile phone market - advertise now the feature of being 'waterproof' - out of the latest phones already a third of new phone models say they're waterproof. Note this is not a sudden beach craze for the Japanese, these are not 'beach' phones intended for the surfing crowd. No, they are waterproof because they are safe to use in the bathtub or shower. Yes, we do take our phones to the bathroom with us. And also to the bath while we bathe. Sega research told us back in 2008 that 42% of the Japanese already took the phone to the bathtub with them. Think about it - a phone call arrives, you want your phone there to take it, without having to rush out of the bath. And use the phone for music, relaxing. Or playing a game, or surfing the web. And of course to send and receive messages. Yes, of course we take the phone to the bathtub. And if then there is an accident and the phone falls into the tub - you want it to be waterproof? Of course you do. Expect waterproof phones from Motorola, Nokia and SonyEricsson too soon in your neck of the woods.

We use the phone as our clock and our alarm. A survey at Portland State University found that only 10% of students wore a wristwatch anymore, because they use the clock on their phone. In Britain the Birmingham Post said 71% of British citizens think the bedside alarm clock is now obsolete, because they use the alarm on their phone. We all do that, Morgan Stanley told us back in 2007 that 91% of the owners of mobile phones keep the phone within arm's distance - or about 3 feet or one meter - 24 hours of every day. Yes, we sleep with the phone next to us. And then the clincher - Lightspeed Research told us in 2009 that in Britain, over half of the total population - 53% - will keep the phone ringing turned 'on' during the night, so that they will be awoken by incoming calls or SMS text messages during the night.

Think about that. Never ever ever in history has there been any device or media or platform that reached us in our sleep (that we did not ourselves set up beforehand, at a set time, like an Alarm clock). Radio cannot suddenly go from 'off' to 'on' and wake us if an emergency has happened somewhere, maybe a Tsunami or earthquake or fire is endangering our home. Yes we can set the clock-radio to wake us up at 7 AM, but that clock radio cannot then use its 'intelligence' to wake us up at 4 AM when the disaster happens. Similarly TV can't wake us up, nor can the internet, nor can the Playstation or the iPod. But we think our phone calls and messages are so important, that over half of us already are willing to sacrifice peaceful sleep. I like to say "the mobile is the last thing we see before we fall asleep, and its the first thing we see when we wake up". But it even reaches us in our sleep! No technology ever was this potent. And its just the beginning.

WE LOOK AT PHONE 100 TIMES PER DAY

The heavy user among the youth will send 100 SMS text messages per day. Thats not just some weird texting freak, its now already 30% of US teens (says Pew in 2010), which is the same pattern as proven years before among the youth from the UK to South Korea. And if you send 100 SMS with your friends daily, you also receive 100 SMS daily. That means, that just for sending and receiving SMS text messages, one third of our youth today worldwide, glance at their phone 200 times every day. What? Yes, this is before the phone calls, before checking the time, playing videogames, listening to music, taking pictures, showing items on the phone to friends, etc. Our youth already look at their phone over 200 times on a typical day. And then lets take the 'other extreme' - adults in Africa - Young & Rubicam told us in 2010 that the average African (poorest continent) mobile phone user (mostly an adult) looks at the phone on average 82 times per day. Its safe to say that for most people on the planet, we glance at our phone at least 100 times daily.

There is nothing else like it. Yes, we may use our PC at work and many spend several hours on the PC. But one session on the PC may last half an hour without a break, often more. Even if we then add the times we go back to the PC to send a quick email or a quick Google search, I think its fair to say a typical PC user has about 10 sessions with the PC per day. What of TV at home - we'll tend to sit and watch attentively through our fave programs, rarely interrupting the attention except for advertising breaks. So if we watch 2 hours of TV at home, we'll probably look at the TV what, 5 separate times in that one session, perhaps 10 separate viewing sessions would be typical. And like the PC, our TV viewing tends to be within a short window of time - for most of us thats during TV's 'prime time' ie evening viewing, on fairly consistent time windows based on our TV viewing habits and our fave TV shows.

The mobile phone gets not twice as much interaction and attention, not three times more, not five times more, but ten times more interaction and attention from us, than any other technology or media! A great business concept taking advantage of this was launched by NTT DoCoMo out of Japan as the 'i-Channel' which brings personalized breaking news headlines to the idle screen of the phone. Imagine the CNN news ticker on the bottom of the TV screen - but on your phone. Except that is it far better - first of all, you get to personalize it. If you don't want the news ticker feed to bother to tell you what the stock markets were doing, just select not to get those. If you want more celebrity gossip, select that option. The personalized news ticker is far more relevant than what any 24 hour cable TV news service an hope to deliver. I am interested in Formula One racing and Ice hockey, don't give me tennis news or golf. Give me more of what I want, and none of what I don't want. This is inherently better! And thats before we take the immediace and urgency through the phone. Its always connected, we get the breaking news on i-Channel long before we are near our TV set to 'watch the news'. This is FAR better. Every network needs to do it. NTT DoCoMo has already introduced it to its partner networks in India and Guam. And what of mobile phone users in Japan? 18% of Japanese mobile phone users on NTT DoCoMo's network loved it so much, they pay 2 dollars per month for this feature (I am already addicted to it even though I don't have the service yet here in Hong Kong, haha).

ENHANCES ANY OTHER MEDIA EXPERIENCES

Not just that we look at the phone ten times more daily than any other technology or media, but only mobile is present whenever we consume any other media. We have our phone within arm's distance when we watch TV - American Idol just earned 100 million dollars in 2010 out of SMS televotes. The phone is with us whenever we listen to radio - UK radio stations have been engaging with listeners via SMS for years now. The phone is with us when we read newspapers, magazines and books. An advertiser can interact with passers-by even with billboard advertising, Audi did that with the launch ad campaign for the R8 - when they let passers-by use their phones, to listen to the engine sound of the new Audi sports car. Even the cinema - where we are told we are not allowed to use the phones - the survey by Disney in 2007 found that 52% of the youth send SMS text messages from the cinema.

Universal McCann told us in 2009 that 1 out of every 7 minutes spent on any mass media, involves our phone. The same study said 77% of TV viewers use their phones while watching TV and that 42% of the population have gone from one medium to another, driven by the phone. If you want a truly mind-boggling statistic, proving that mobile goes where no tech has ever thought of going - now Retrovo reports out of the UK, that 10% of British youth think its ok to send SMS text messages... while having sex. During sex? Sorry honey, can you move your head, I am just sharing this experience with my buddies. Sending SMS during sex? Yes, already one in ten British teens think nothing of it.

Which brings me to texting blind. 42% of US teens can send SMS text messages with their phone hidden out of view such as in their pocket or under the table said Nielsen in 2010. Nothing new here, the USA again follows global patterns, this was reported by UK youth by SubTV back in 2006. And they multitask doing it - 48% of British youth were able to carry on a conversation with a parent or teacher or someone like that, while simultaneously sending SMS messages - said Carphone Warehouse in 2006. The phenomenon is again global. There was an airline hijacking in Mexico City last August, where one of the hostages on the plane was sending updates to the outside world with her phone hidden in her pocket. Not a teenager, an adult woman. And at one point the hijacker had been holding her other arm. She continued sending messages in secret with her phone in her pocket - a Blackberry by the way - and she later illustrated this ability on Mexican TV when the hostage drama was over. Yes, SMS can save your life even, isn't it time you learned to send SMS text messages blindly? There has never been anything like this before.Mobile is the newest, the 7th of the mass media channels, and it is the most versatile and most magical.

MOBILE WITH OTHER MEDIA

Mobile is not just a glue to connect multi-platform media experiences, it is the money engine to generate revenues to dying media concepts. For example in India the Economist gives a free headlines service with topics from this week's issue. They grew magazine single issue sales by 25%. Similarly in Canada the Hockey News launched its mobile phone magazine, which not just turned a profit by its own, it did not cannibalize print sales, the print edition reversed its decline, and grew circulation by 5% driven by mobile. No wonder today all major Chinese newspapers offer a twice-daily headline service which I told you, is used by 40% of the total readership making tons of money to the struggling print industry. And the weirdest print story has to be the amazing success of mobile phone books out of Japan. As far back as 2007, five out of the top 10 bestselling printed books, had started their life as mobile phone books.

And even more weird than that - most of the Japanese mobile phone books, were written on phones! Yes, these tend to be youth novels, written by youth authors - using their mobile phones to author the books (trust me, I will never author a book using the keypad of the phone, no matter how great Blackberry or a future Nokia Communicator keyboard may be, haha). But yes, think of the Facebook, SMS-crazed youth generation is today. The heaviest users of SMS text messaging are the population of the Philippines, where the whole population averages 26 SMS sent per day. The average length of an SMS is 160 characters. If we say an average SMS text message sent in the Philippines is half that maximum length, so lets call it 80 characters, then an average Filippino will create enough new text to fill a normal paperback book in about 4 months. If you do it daily, the words really build up haha.

So if you're a young Japanese teenager girl who is having romantic trouble and reports the ups and downs of her love-life in her journal or diary - which today is of course social networking, and in the case of Japan its a mobile phone based blogsite - how much effort does it take then to turn that into a novel? Most of the text is already created.. In fact thats how most first-time authors of Japanese youth novel authors start their first books. They write their diary or their dreams or fantasies on their mobile blog, and then find out that there is a paid market to turn that into a mobile phone book. Its almost no risk to the book publisher. They pay based on how many mobile pages are delivered to paying customers. If the book is successful on mobile, it will then be released in printed book format, and may lead to a TV show or movie etc as bestselling m-books will of course do.

The value of mobile phone books jsut in Japan passed 430 million dollars in 2009. The average Japanese mobile phone owner spends over 4 dollars per year on mobile phone book content. Some books are sold by chapters, some books are comic books (manga) and some have social networking and gaming elements. Many have multimedia parts and of course some are reformated ebooks. But note, the purely PC internet based classic eBooks in Japan, like you might read on a Kindle, are worth only 67 million dollars. Mobile phone books outsell PC or 'Kindle' style ebooks by 6 to 1 already. And if we projected the Japanese spending to a global audience, at the ratio of how much Japan's mobile industry is of the world, the book publishing industry stands to gain 6.5 Billion dollars out of mobile phone based books. No wonder this is rapidly gaining the attention of all major publishers. Even my little publishing house, my consultancy, turned to mobile phone books with my series of 'Pearls' ebooks and my TomiAhonen Almanac - which were formated for the small screen so my readers can carry these resources on their smartphones for immediate daily access to the statistics and case studies.

The world is changing more than you can imagine. Some did foresee that the internet would migrate to mobile phones. That was the easy part. Some very visionary people foresaw that some digital media like music, gaming, perhaps even TV would migrate to phones. But print media like books? It seems anathema. Yet this industry, mobile, is full of those counter-intuitive phenomena, that have caught out even the best of us time and again. We cannot go with 'reason' in mobile. We may try to guess what the future may look like, but we have to pay attention to real facts, globally, and be prepared to adjust to those facts, accept them and move on. The mobile industry is the most counter-intuitive and most myth-filled of any new industry. It seems at times, that all rules of 'reason' are removed - we pay more for a short snippet of a song (as a ringing tone) in poor quality, than the same song as a full MP3 file. We insist our emails are free, yet we are willing to pay 10 cents per message for our SMS, where again the length is capped and there is no ability to format and no ability to add attachments. The mobile industry is full of such strange facts.

But that is why this blog article. I want to help you navigate this treacherous new industry, where so often 'madness' seems to rule the day. Yet, the mobile data industry alone is worth 250 billion dollars - more than the total internet industry including content revenues, all search and advertising revenues, and all dial-up and broadband access revenues. Yes, mobile data alone is bigger than all that - and younger and growing much faster. The mobile data business alone is bigger than the global music industry, the global videogaming industry, the worldwide movie box office and all residuals incomes including rentals and DVD sales of movies, and the worldwide radio industry - combined. This is a giant industry and growing at breathtaking speeds.

THE INTERNET ON MOBILE

Which brings us to the mobile internet. And then yes, we see the clash of the internet/PC thinking and the mobile/telecoms thinking. There are many very reputable experts and pundits who claim with great confidence that the internet will win, and in the future there will 'only be one internet', and that the internet will absorb the mobile world.

Maybe so. That is certainly a valid point of view and there are many who say so, including many of my peers that I greatly respect. But first, lets listen to the CEO of the world's biggest internet company, Google. Eric Schmidt has been saying for many years that the future of the internet was 'mobile mobile mobile' but recently he's been shifting his story to say 'mobile first.' Note he is not saying 'internet first'? He's been saying 'mobile first' to his employees and all Google partners, that they have to design - like Google now does systematically in all its new product designs - 'mobile first.'

I think its pretty clear that any reasonable interpretation of Google 'mobile first' - especially when that is said by the world's largest internet company - that there is something 'different' on mobile, certainly it must be different from the 'legacy' internet on the PC. That a 'mobile internet' may be different from the 'legacy internet' that we all know, perhaps. Or maybe its not about the 'internet' on mobile, maybe there is a 'mobile services' world, which is different from the familiar PC based internet world.

OLD INTERNET WILL OFTEN MIGRATE TO PHONE

So, first the obvious. Anyone who has used the iPhone can easily see, that there is a very compelling internet experience now possible on smartphones. Other high-end phones, such as many from the Google Android series of handsets like the Motorola Droid/Milestone and many HTC handsets can clearly give similarly comfortable internet experiences in our pocket. It is not as good as a big screen full keyboard notebook, but obviously we also have various mid-point devices like the netbooks and now the iPad, which sit somewhere between the fully fledged PC and the pocket smartphone, in delivering our internet experience.

So yes, we can take a totally unmodified 'real internet' and use a modern large-screen touch screen smartphone, and have that 'real internet' in our pocket. This is technically totally possible, and many smartphones have pricing plans that allow unlimited internet surfing from the smartphone. So yes, its totally possible to do the totally 'real' internet, exactly like on our PC, and have that on our phone. And while the experience is not the same obviously, there are many who like their mobile internet experience so much, they say they don't need a PC anymore. This is not the majority of smartphone users, but a growing slice of those users.

Note that I am not saying that all internet use will migrate to the phone, not in the near future certainly. Still at the end of this decade there will be hundreds of millions of personal computers in use, no matter which scenario happens. And most likely there will be well over a billion PCs in use worldwide for at least this decade. The smartphone will not eliminate the internet opportunity from our trusted PC. But the population of smartphones is growing far faster than that of PCs. The smartphones cost a tiny fraction of that of the typical PC. Smartphones already sell more than all portable PCs (laptops, notebooks, netbooks and tablets combined) and shortly will sell more units annually than all PCs. The replacement cycle for mobile phones globally is about 18 months, and for PCs is about 3.5 years. Probably as early as 2011 but latest 2012, there will be more smartphones sold worldwide than all types of PC computers including desktops, laptops, notebooks, netbooks and tablets like the iPad, combined.

And recently just about all PC makers have acknowledged that trend in some way or another, and all of the big 5 global PC makers, HP, Acer, Dell, Lenovo and Toshiba (and Apple obviously) have already entered the smartphone space knowing the smartphone is the 'next'; computing platform where they all will compete. But the trends are now crystal clear. In 2007 PC:s outsold smartphones by more than 3 to 1. In 2008 that was down to 2 to 1. Today its less than 1.5 to 1. And yes possibly next year or definitely by 2012, more smartphones will be sold worldwide than all types of PCs. The race is clearly being won by the smartphone.

What of that 'real internet'. Yes, any smartphone can give the user access to the 'real internet'. But so can about half of all phones in use in the world, most of those are 'feature phones' with an HTML style browser. To understand - the Apple iPhone currently sells about 3% of all phones worldwide. Their installed base forms under 1% of all phones in use globally. Blackberry by RIM sells about 4% of all phones worldwide, and their installed base is about 2% of all phones worldwide. If you designed any apps or web pages that are optimized for iPhone or Blackberry, or even if you covered both platforms, you are still abandoning 97% of all phones on the planet. That is hardly a 'mass media' or 'mass market' approach to anything. Its ultimate cherry-picking of very exclusive (but often wealthy) users. Its like doing a newspaper ad campaign, but limiting your total newspaper ad budget to the Wall Street Journal and Financial Times. Yes, if you sell business services like say stockbroker banking services, that may make sense, but even for say BMW cars, it would make sense to add the New York Times in addition to the WSJ and the Times of London in addition to the FT, etc to the newspaper ad mix, not only such an extreme limitation of 3% of the total population.

What then of Nokia and Symbian? Yes, with Nokia smartphones you would reach a far larger smartphone user base (except obviously not in North America) and get into the pockets of... 6% of all mobile phone users worldwide. While thats twice the installed base of all Apple and all Blackberry combined, its still small potatos. So that is not your answer either. Even if you take all smartphones of any kind, all Windows Mobile smartphones and Palm and Linux Mobile and Bada and what-have-you, the total installed base of all smartphones of any kind, is 11% of all phones in use. That is not a mass market. You are automatically abandoning 89% of the total worldwide phone user base.

Now the good news. Over half of the world's phones have an HTML browser. Yes, you can a little over half of all users - a massive 2.3 billion people - far more than total PC penetration, and far more than total TV ownership - just by using HTML 'real internet' and browser-based services on mobile! Now, note that obviously nowhere near all those phones are currently being used that way, but while many report those famous Admob statistics (where iPhone is claimed to get the biggest ad traffic), a rival ad network Smaato reports that Symbian traffic is bigger than iPhone, and the non-smartphone browser based mobile web traffic is the biggest of them all. Surprised? (there are actually over 30 international mobile ad networks, so please don't ever think that Admob alone will tell you what the mobile advertising world looks like. They only report on their own network and their data is very heavily skewed to US and iPhone users.)

The bad part is that most of those real internet feature phone users still today do not surf the web on their phones. Many have bad pricing plans (not like the iPhone users who mostly have 'all you can eat' data plans), many have slower connections, 2.5G not 3G, etc. Most do not have WiFi. Some users have had bad experiences with past phones and are 'sticker shocked' and avoid mobile internet use.

So there is huge potential here, but certainly still many stages of user adoption. Regardless, you can reach nearly 5 times a larger audience by targeting HTML internet users on mobile, than targeting all smartphone platforms, combined. But of the world's internet use, this year we've passed the half-point, that more than half of global internet users now come from mobile phones as Nokia reported in 2010. I monitor the individual markets and today already 6 of the 10 biggest internet markets by number users, have more than half of their users accessing the web from mobile phones (China, Japan, UK, India, Russia and South Korea). In most of the remaining Top 10 countries the mobile users are rapidly catching up with PC based users, even in the USA. And in some of the Emerging World countries, the ratio of mobile phone internet users to PC based internet users is so lopsided it ranges from 3 to 1 in South Africa, to 10 to 1 in Bangladesh.

DIGITAL DIVIDE

For this, we will see the Digital Divide in its most profound ways. In the 'Industrialized World' we are wealthy and we can afford multiple technologies. There already is a personal computer for 57% of the total population of the wealthy part of the Digital Divide. Beyond the divide, its a totally different story. They mostly cannot afford even the cheapest netbooks. The penetration rate of PCs is less than one for every ten people. And even where they have PCs, they suffer from lack of electricity or unreliable electricity, lack of internet, or unreliable internet, and very poor broadband penetration, at very high costs of broadband, at very slow speeds of broadband. We in the Industrialized World can easily afford to consider buying an iPad as a 'second computer' for the home, we are that affluent. We have multiple radio receivers, often two TV sets in our home, we tend to have access to one or two PCs (maybe one at work, another at home), and we have a fixed landline phone and a mobile phone. That is the technology landscape for us, the lucky members of the Industrialized World, where 1.2 billion people live in Europe, North America, Australia, and rich parts of Asia like Japan, Singapore, South Korea etc.

In most homes of the world - the Emerging World countries - where 5.6 billion people live on the other side of the Digital Divide, the standard of living is so low, that only one in five have an FM radio ! If you can't afford that type of simple technology with 'free' content of news and entertainment, like a radio - then you won't even dream of buying a PC. There is a TV set for only one in 8 people, and a personal computer for one in 11 people, and a fixed landline phone for one in 12 people. That is the landscape for the Emerging World. You often go to your rich relative's house to watch TV for example. And until recently, you went to the rich relative's house to borrow the phone too. That changed.

Today there is a mobile phone for more than half of the population in the Emerging World countries. Yes, more people own a mobile phone than own an FM radio receiver in what used to be called the 'Third World'. In this part of the world, especially in poorer areas of it like in Africa, there is no point in considering mobile as the "7th mass medium", because the first six media are not for the masses. Very literally, mobile the "first mass media" channel in that market. The only way to reach as much as half of the population - with a reach 4 times bigger than TV and 6 times bigger than the personal computer. If you are a media brand or a bank or any kind of service industry - mobile is where you start your customer contact.

So in the Emerging World, the only possible way to get connected to any internet-style content is via a phone. The managements of the mobile operators/carriers in the region, like in Bangladesh and India - say that the first and only way most of their populations will ever get 'online' will be via the mobile phone. And most of those phones will be far simpler phones than 'smartphones' like an iPhone. They will be simple phones often with very basic small 2 inch screens, basic colors or even monochrome, and yes, they will access the web content using 'WAP', rather than the 'real internet' using HTML.

MOBILE WEB IS DIFFERENT

And that brings us back to Google's CEO Eric Schmidt and his 'mobile first' strategy. A 'mobile web' user, a 'mobile web' usage situation, and a 'mobile web' pricing situation, and a 'mobile web' device experience - are all different from the classic PC web. There is no one internet, there are two internets. There is the PC internet we know, and can use for example on a smartphone. And then there is something which is mobile only, called for the lack of a better word, the 'mobile internet'.

To start with, a large proportion of the total user base of 'mobile internet' will use WAP, not HTML browsing. WAP is not the web. WAP is a simplified environment, where 'web like' experiences can be built. The tools are similar, but often far more limited. WAP competence is harder to find than HTML competence. WAP pages have to be designed to fit the mobile browsing situation. But while technically, WAP is different from the HTML 'real' internet, for end users of most major internet brands, WAP seems the same as the web.

They still access all the 'usual suspects' of the internet brands, Google search and Yahoo email and Amazon bookseller and YouTube videos and Facebook social networking and eBay auctions and CNN news - but each of these have WAP pages set up, and most random users on a phone who go to the Weather Channel or the BBC news site or MySpace or whatever major internet brand on a phone - will tend to do so on WAP. Not you and me, mind you, we have our smartphones with our HMTL browsers. I am talking of random normal people, those 89% of the planet who have a mobile phone account, but do not own a smartphone. For them, very likely their 'internet' experience on their phone was in fact a WAP experience. They don't even know it, but go to Vodafone's mobile internet home page, then click on Google and you're on Google's WAP based mobile internet site.

It looks totally familiar, the Google logo and your search window. Except if you have a laptop and a WiFi connection and compare them side-by-side, you instantly see, that the mobile Google version is 'different'. Its totally familiar, yet it has been 'optimized' for mobile. The screen space is used very efficiently. And then try a search, you find two things - less results per page, and number-keypad oriented navigation options! The mobile internet -optimized 'mobile web' (ie WAP) pages are usually designed so, that T9 based WAP phone users can still easily navigate them - phones that do not have touch screens, do not have a mouse, do not have a trackball. So to help navigate, they often allow the numeric keypad to be used to navigate and select options. You never noticed that before? The 'mobile internet' is deceivingly similar, yet definitely different from the 'real' internet.

Then we get to optimization. Which should you use? And now think of Google's mantra, 'mobile first'. The world's biggest, dominating internet giant, also its most profitable - which has by far most of its users accessing its services from a PC - says they will do all their future innovations 'mobile first'. They actually suggest that now, in 2010, its already time to prioritize the mobile web - the mobile phone 'optimized' web - ahead of the familiar PC based web. And this is again nothing new. The world's most advanced mobile market, Japan, has been that way for many years already. The Japanese regulator reported that way back in 2006 the traffic had shifted so, that the majority of internet access in Japan was from mobile phones, not from PCs. And obviously today all major Japanese internet brands prioritize their web page design to be phone first, and PC as the optional alternate page design.

IS NOT A CRIPPLED PC

There is a good reason for why do 'mobile first'. Again the superficial examination leads us astray. You may come from the world of the PC or the internet, and look at the phone, and think 'hey, its a dumb little brother of the PC' because the phone has a small screen, or the input of the phone is so clumsy compared to the big 101 key keyboard - and mouse - of the typical PC. I hear this often. The assumption is that a mobile is somehow 'crippled' compared to the PC in its inputs and outputs.

Nothing could be further from the truth. Lets start with the screen. If screen size ruled, today TV would have nothing to fear from the internet, and the world's biggest mass medium would still be cinema (as it was early in the past century). Screen size is totally a red herring. It cannot decide which media rules, else the internet could not possibly challenge TV today. There is something more to the screen than just its size. The internet brought us 'interactivity' to the screen, something cinema and analog broadcast TV could not do. And mobile too is inherently interactive. An interactive screen seems to 'trump' the size of the screen.

Now, if we compare a PC screen to a mobile phone screen, we get some benefits to one, other benefits to the other. Mobile is not 'worse' - mobile is different. Its like comparing a bus to a taxi, both have their valid uses in any city public transportation. Yes, there is overlap, but both have clear opportunities where the other cannot match. The PC has a bigger screen, so it has the size advantage. The mobile? First of all, the mobile screen can be rotated by the user (easily). Think of the iPhone, just flip the phone and your picture flips on the screen. Imagine a map, its easy to rotate the phone in your hand to get the map the way you want it. Thats not easy to do with a traditional laptop computer (it is probably as easy to do with the iPad as a phone). But mobile has another strong advantage - like I like to say, "but on the other hand... you have your other phone."

Yes, already more than half of Western Europeans who have a mobile phone account, actually have two phones (and at least two accounts). That is again a universal trend where as with all mobile trends, the USA lags but follows obediently every trend. In the USA about a one in five US cellphone users actually walks around now with two phones (think Blackberry from work and iPhone for private use, for many business execs). So now, if we consider one big screen on a laptop, or two separately connected screens on two phones. The phone screen option is different. And the trend in laptop computer screens is the shrinking screen - laptops and notebook PCs had 14 inch screens, now the newer netbooks typically have 9 inch screens as does the iPad. Mean while the trend in phone screens is growing - the average screen size grows about half an inch per year says IE Market Research in 2009. The iPhone has a 3.5 inch screen and already today we are starting to see 4 inch screen sizes in the USA (my Nokia E90 Communicator had its 4 inch screen back in 2008) and 4.5 inch mobile phone screen sizes are now in top phone models in Japan and South Korea. And high-end phones are starting to have "TV-out features", something we saw first in Nokia five years ago, and even the newest iPhones now offer TV out. So I can call your 9 inch netbook screen or your 14 inch laptop screen, or even your giant 20 inch desktop PC flat screen - I'll trump you with my 50 inch plasma TV screen, using my mobile phone and its TV-out feature, haha.
 
The last thing to bear in mind, is that the mobile phone screen is typically held far closer to our eyes, than the laptop screen. So some of the size is mitigated by distance - similar to how the home TV screen is watched at far shorter range than the giant silver screen of the cinema.

Yes, the mobile phone screen is smaller, but its an interactive screen, it can be easily rotated, we often have two of them, we look at the phone at a shorter range; and the phone screen sizes are growing where PC screens are shrinking. Don't think screen size will determine who wins. Remember, TV was always bigger in screen than the internet/PC, and cinema totally dwarfs TV in screen size. Size doesn't decide. Yes, it matters, but it doesn't decide. The mobile screen is 'different' not 'weaker' than the PC screen.

TINY KEYPAD

And what of the small keypad for inputs? Yeah, if you want to write a lot of text, a PC keyboard is far more convenient than even the best of smartphone QWERTY keypads. And most phones today have the T9 style keypad, where you have to triple-tap the numeric keys just to generate any alphabetic characters. Tedious. Yes. I'll grant you text entry is better on a PC than on a phone. Its not impossible on a phone, but PC is better.

But let me give you a counterpoint, in any case. Teenagers who are comfortable with T9 keypads, can actually type faster on a phone than on a 'real' PC with its full-sized QWERTY keyboard. Why is that? The QWERTY keyboard on a typical PC is of course a relic from the typewriter. QWERTY was an American idea of placing the keys in the order of what are most used in the English language towards the middle of the keyboard, and the not-often-used letters to the edges. First, obviously, the QWERTY format is not in any way relevant at all to other languages, and secondly, there is no conceivable 'logic' to the sequence of the letters. You can not reason where a given alphabet letter 'should' be on the keyboard if you don't know. The only way to master a QWERTY is to memorize the layout.

But a T9 keypad is easy - its in alphabetical order! And even better, you only need to memorize the location of 8 keys (the 1 key and the 0 key do not have alphabetical characters on them). So anyone can easily memorize the layout of T9 in just a couple of days of heavy SMS texting, but it takes considerable effort to memorize all the keys of the full PC keyboard with QWERTY keys. And if you have not memorized it, you have to look down from what you are writing - and try to find the key you want. This is significantly slower a, because there are more keys b, because the keyboard is far bigger so your eyes have to scan a far bigger area to find the letter, and obviously c, because the keys are not in any logical sequence. On T9 if you forget where a letter is, its very fast to find it on one glance.

PHONE IS BETTER AT INPUT

But I will grant you, that yes, for any serious text entry - like this blog for example - we will prefer to use a 'real' keyboard on a PC. Now, my point is, that data entry is far easier on a phone than a PC. What? But Tomi you just granted the argument that text entry is easier on a PC than a phone? Yes, 'text entry' is easier on a PC, but not all 'data entry'. There are plenty of other data formats, more advanced, than text. Want to enter sounds? Far easier to move the phone microphone near your sound source, than moving your laptop with its built-in microphone. Want to enter pictures - now phones win hands-down. Most desktops don't have cameras at all. Many laptops still don't. And try to use the camera of your laptop to take a picture of something other than yourself in video call. Its very tedious (and of poor picture quality). The screen is facing the 'wrong way' for 'camera use'. But at the high end many of our new phones now have 12 megapixel cameras already, many with 'real' Xenon flash units. Some premium cameraphones have added 'real' zoom in optical zoom (in addition to the far cheaper electronic gimmick of 'digital' zoom). These are proper semi-professional cameras already, top end cameraphones.

A picture is worth a thousand words. I can trump data entry of any PC one thousand-fold, instantly, by clicking on the camera shutter and taking a picture - and using that phone, to send it instantly to over 2.9 billion people on the planet who have an 'MMS-compatible' phone in their pocket. Yes, thats more than twice the installed base of PCs. Meanwhile lets compare to pictures via the internet and PC. Most who want to upload pictures to Flickr or Facebook, have to have a separate stand-alone digital camera. So imagine the wonderful sunset you see. Now go get your camera. Take the picture. Then come back to get your PC, turn on your PC. Wait a 'microsoft minute' for it to load up. Use the USB cable to transfer the picture to the PC, then open the picture in their picture viewer software and save it into some file. Then open the email application - oh, wait, you also need your internet connection (you might be somewhere on a trip for example, with your laptop outside of WiFi range, where the picture was taken. For you to find WiFi connection it might be the nearest Starbucks or your hotel or your friend's house, so this may be hours, even days later than the photograph was taken) and upload the picture to the picture sharing site, or include it in an attachment in email to a friend. In the best case, moving the picture from your standa-alone camera to your PC and then sending it via email or uploading to a picture sharing site (assuming the PC had to be turned on and logged to broadband or WiFi) will be minutes slower, than the instant upload from the cameraphone. Thats your best case scenario.

Yes, it can be done with a PC, but today the picture sharing experience is FAR more tedious for the average shutterbug on a PC than on any cameraphone. CNN i-Report for example receives over 10,000 citizen journalism images and clips monthly - by far most of those are snapped on cameraphones. And out of all digital content that mankind has created, the whole internet etc, by far more of digital content is in images than in text format. My mobile already wins your laptop and its stand-alone camera many times over 'by input' speed.

But if you still argue PC text entry, I will double down on my cameraphone and raise it to video. A moving picture tells the story of a thousand images. Thats a thousand times thousand - ie million times better than text entry. Try to tell the movie of Avatar or the latest Shrek in text without any images and no moving video or sound. Try to get the exact emotions and feelings and experiences across. I think it is pretty fair to say thats a million times more hard, than just sharing the video of the movie?

Almost every cameraphone does video recording too (even the iPhone, which strangely didn't offer this at the start, has joined this ability). Today top cameraphones record not just DVD quality video (thats old hat, my Nokia N93 recorded DVD quality video back in 2006), now top phones record HD quality video. Most of the content that exists in digital format for mankind today is not in text format or as images or as music; most of the total digital content in data volume is video. Video consumes the most digital bandwidth, so in terms of richest experience and most storage that is used worldwide, that is in the DVDs we have for our movie collections, and the videos on YouTube, rather than the pictures on Flickr, or the text in our blogs and on Twitter. Video creation is child's play on a cameraphone, but try to create any type of video - other than your own video call - on the stationary inward-facing camera of your laptop. Or then, try your digital camcorder, and find the right cables to connect to your PC - you may well need an adaptor you don't have. Or then find that the memory on your PC and CPU is not strong enough to process the video. And if you do, then you still need video editing and viewing software on your PC. Most PCs don't come with that bundled in, remember, not everybody is as geeky as our readers here on the Communities Dominate blog. My parents couldn't hope to save their videos onto their family PC, even though they're pretty tech savvy haha.

Yet anyone can shoot video on a phone, and then send short snippets of video via MMS to friends. Easy-peasy. And most 3G phones do video calling, so they can use services like Qik for instant 'video blogs' - one button uploads that others can share in viewing, and with automatic feeds to social networking sites like YouTube if you want. No cables needed, no special software to install to your PC that is often very complex to use, no media engineering tech courses to attend. Its that easy that CNN for example issues 3G cameraphones to its journalists as back-up broadcast camera units, in case the journalist finds himself or herself without the broadcast TV truck but is in the middle of news.

MOBILE INPUT IS LIKE MAGIC

And I haven't even touched on several more exotic data entry methods that are exclusive to mobile. We can do touch screen of course (not exclusive to mobile, but far more common than on PCs, last year 184 million touch screen phones were sold, according to Gartner. That is several times more in just one year, than all touch screen PC devices ever made). But lets go further. What of the 2D barcode reader? This is sheer magic. We can embed a web address, like http://www.communities-dominate.blogs.com (41 characters plus the 'enter' key on a laptop; 76 characters using T9) on a QR code, ie 2D barcode. Then we can point our cameraphone at that square squibble, and within a second, the full text of http://www.communities-dominate.blogs.com appears on our phone screen ! This is magical. This is wonderful.




This means we bypass ANY typing need at all. It is inherently better than typing on any keyboard. And inherently faster. And inherently more accurate. Its so incredibly user-friendly, that just 3 years after 2D barcodes were launched in Japan, 76% of the total population was using them - and utterly loving them. And you can't read 2D barcodes with the camera on the typical laptop. It does not make typing obsolete, but it sure feels like it when you use it, and it makes any URL entry seem hideously outdated if you have to type it in by text. Why isn't every website accessed with 2D barcodes? (I have been using a 2D barcode on my business card since 2006 - that was obviously already 'normal' in Japan by then)

And there is so much more. We have many automated data entry methods. We can do data entry with motion sensors (like the Wii gaming console, or like the iPhone and many modern smartphones). We can do data entry by proximity sensors. We can do data entry from the network - take location positioning for example. The phone is far superior to any laptop in data entry methods. So don't let any 'expert' bamboozle you into thinking the phone is inferior in its data entry or screen abilities.

MOBILE IS CANNIBAL OF CANNIBALS

But each new media channel tends to bring new benefits too. Mobile is the 7th mass medium (print was the first mass medium, recordings was the second, cinema third, radio fourth, TV was fifth and the internet the sixth mass media channel). Mobile is what we call an inherent threat mass medium because it can technically and commercially replicate all previous existing mass media (the internet was the first inherent threat mass media, for example on radio you cannot show cinema movies, so radio could not cannibalize cinema; but on the internet you could deliver books, music, movies, radio and TV content). Yes, on mobile we can both technically and commercially deliver books, magazines and newspaper content (ie cannibalize print); we can deliver music and videogames ie recordings content; we can offer movies, radio, TV; and we can offer the legacy internet.

Remember, we don't need to do it as well on the newer medium, as long as it is technically and commecially viable. Its clear that a major hollywood blockbuster movie works 'better' in the cinema than on the home TV set, yet even though TV is 'not as good' as an experience, every movie ever made, has also been shown on TV. So don't think that you don't want to watch a movie on your Blackberry. Neither will I. But ask your kids, they already watch movies on their Playstation Portables. Of course everybody wants a giant plasma screen TV to watch movies, but kids today are totally ok with watching TV and movie content even on the very tiny screens on some iPods and basic cameraphones. It is techncially and commercially viable. And remember what I told you about books, consumed (and even written on) mobile phones. I am so old, I want my books in printed form, but many younger people truly prefer to get their books in ebooks or mbooks only.

And now we do need to listen to the media experts. Warner Music CEO Edgar Bronfman said in 2005 that the future of music was on mobile phones (not on iPods by the way). The past BBC Managing Director Greg Dyke said in 2006 that all broadcast content, TV and radio, will be available on mobile phones. Maurice Levy, the CEO of Publicis, the world's second largest media empire, said in 2006 that within a couple of years 'most of the information and most of the advertising' will go through mobile phones. Its not that the mobile industry giants like Nokia or Motorola or Vodafone or T-Mobile or Ericsson or Alcatel-Lucent are trying to convince us that there is a mobile future for media. Its the biggest global media brands, who have been saying for many years already, that the future of their media content is on the phone. And not on the intenet, the 6th mass media. No, its on mobile, on the 7th mass media.

And we see the transition. The first industry to experience mobile cannibalization was music (the first downloadable 'pop music' ringing tones were launched in Finland in 1998) and in 2009 the value of mobile phone music was 12 Billion dollars according to Juniper Research. When we put that in context of the global music industry which was worth 18 Billion dollars in 2009 according to IFPI, which ignores most basic ringing tone income of mobile in its calculations, we get a total consumer spending worldwide in music of about 30 billion dollars in 2009. And mobile has already cannibalized 40% of that, in only 12 years. Mind you, Apple's famous iTunes music store has in almost as long (the iPod was launched in 2001) achieved only about 2 Billion dollars of sales annually, so Apple has cannibalized about 7% of the global music spending. Makes you think? Mobile music is six times bigger in revenues than iTunes? Yes its true but again, this is not well known, its so new and so strange. The Apple iTunes example keeps popping up in all stories about music and digital. Ringing tones and the other about a dozen mobile music formats are mostly ignored. Obviously Warner's Bronfman was totally correct. We could make similar calculations for the gaming industry, the newsmedia industry, etc, but this blog is long enough as it is. The point is, all media giants acknowledge mobile will be part of their future.

Oh, I have to make one more point here, while we're on ringing tones. Note that the cannibalization does not work 'the other way'. Its not possible to deliver all mobile content and services (technically and/or commercially) that we have on mobile, onto any of the legacy six mass media. Not even from mobile onto the PC based 'real' internet. Now you laugh, I know. You say, thats impossble Mr Phone Consultant, we can do anything you can do on the phone, on the internet. And yes, no doubt you believe that fully and whole-heartedly. It is so obvious, any digital service or content can be put on the web.

But can you cannibalize mobile media? Ringing tones are worth 5 Billion dollars all by itself - thats 2.5 times more than all music sold by Apple on the iTunes store annually, a significant chunk of money - and not a secret, ringing tones are 12 years old - and all major artists release ringing tones, from 50 Cent and Madonna to Lady Gaga etc. So? We have ringing tones in mobile. What of PCs? Have you ever heard of anyone who installs ringing tones to their PC? Who installs ringing tones to their TV set? Who installs ringing tones to their newspaper? Who installs ringing tones to their radio? We can't do ringing tones in any other media except mobile. Absolutely concretely iron-cladly absolute proof, that ringing tones are not a viable commercial media opportunity on the internet. Not viable. So there are major 'billion dollar' industries of digital content, that were invented on mobile, that work ONLY on mobile, and cannot be ported 'back' to any of the six older mass media, including the internet. Yes, mobile can cannibalize ANY legacy mass media, yet mobile has abilites that no other media can match.

You want more? I have hundreds more. Take ringback tones - worth 4 billion dollars according to that same Juniper study, invented in South Korea and taking the world by storm. Most of the digital music revenues out of China are now made in ringback tones. In Turkey ringback tones are one of the hottest new advertising media. They are hits from Japan to Russia and Israel. Yes, four billion dollars worth. Can't do ringback on the internet, can't do ringback even on a 'sound' media like radio or recordings. Only on mobile.

Don't like music examples? What of Augmented Reality. We have Layar, who do a whole media empire around their 'layers' of media content, advertising and information and entertainment, super-imposed upon the real world, and one that is only accessable through a smartphone with the Layar 'Augmented Reality Browser'. Yes AR Browser. What browser do you use on your laptop? Microsoft Internet Exploder? Google Chrome? Perhaps an old copy of Netscape? We can do HTML web browsers yes on a phone, but on a phone you can do an Augmented Reality browser - which is completely impractical on a laptop of any kind (to begin with, the laptop camera faces the wrong way for AR browsing). Show me one laptop that has Layar or any other AR browser on it. There isn't one. Its not techncially and commercially viable on anything else except mobile. Maybe in the future we'll have 3D glasses that can do it too, but not today. Not for the mass media in any format. You can't do augmented reality on TV, not on radio, not in print, not in recordings. And not on the internet on a PC. I have made my point.

The mobile can cannibalize anything from legacy media, but new inventions of media content for mobile can be of the type, that can not be replicated on any legacy media. Wow, that is power. Its like when cinema, the third mass medium came, and you had moving pictures, that were completely impossible in print or early recordings. Think about it, there was no way to take a movie and put it in print. It would not work. 24 frames per second, try to print 130 thousand pictures (a movie of about an hour and a half) one after other in your newspaper and somehow create a 'moving pictures' experience. Even if yes. technically we can print 130,000 pictures in one newspaper or magazine, that is utterly totally commerically impractial. Nobody would buy that magazine or newspaper. And even then, you don't have the sound! Just can't be done. When movies the third mass media came along, it was so radical, there was no way to do it in print the first medium, nor (early) recordings, the second medium. Obviously when we finally got video cassettes 75 years later, it was then possible to also show movies in the second media, recordings. But yes, that is a long time to wait. Today we have hundreds of media formats and concepts that work only on mobile, cannot be ported back to any legacy mass media, not even onto the 'real' internet on the PC.

We are doing magic in mobile today. Augmented Reality is a perfect example of magic. So are services such as instant speech translators, of music recognition services like Shazam. I mentioned the magic of the QR code ie the 2D barcode. This industry is creating magical experiences for users in mobile. A bit like early search engines seemed magical nearly two decades ago. Now we have such a magical moment in media again. A golden age of media in fact. The mobile era.

8 UNIQUE BENEFITS OF THE 7TH MASS MEDIUM

Why is it that we can do unique services for mobile that cannot be replicated in legacy media? Why is this such a rich moment in media today? Yes, part is that mobile is so pervasive. Part is that mobile is addictive. Part is that mobile is exceptionally able at cannibalization. But the biggest part - and the least understood part - is that mobile has unique abilities. Not just one or two, there are 8 unique benefits to mobile, that no legacy media can do. Not just one ability, but 8 of them. This is a list you the reader better jot down or preferrably memorize, and use in every slide presentation and article and internal memo you ever write about mobile from now on. Here are the keys to the magic kindom. Here is how the next billionaires are made on the planet. Those who understand these 8 are the next barons of industry for this decade and the next. The 8 unique benefits of mobile are:

1st - mobile is the only personal mass medium

2nd - mobile is permanently carried
3rd - mobile is always connected
4th - only mobile has a built-in payment channel
5th - mobile is available at the creative point of inspiration

6th - mobile has the best audience information

7th - only mobile captures the social context of consumption

8th - mobile enables Augmented Reality to mass markets

I have written extensively about these unique abilites on this blog and in my recent books. I lecture about them on all six inhabited continents and feature them of course at my Oxford University short courses. Most of the biggest success stories in mobile have based their concept on one or some of these 8 unique abilities, rather than copying tired media formats from legacy media, like copying internet ideas onto mobile. I am not going to make this blog a repeat of those 8 beneifts. They may seem to be 'untrue' ("Tomi, the internet is also a personal media" - not it isn't, it only seems like it to some users, not even all users). Some may seem like they are the same thing (isn't 'permanently carried' almost the same as 'always connected' - you could call them 'always on' - no they are quite different benefits with their own market opportunities) and some may be difficult to comprehend from the short description (what is the 'social context' of consumption?). You can read about them at these two links -the first 7 benefits described here, and the 8th benefit is discussed here.

Also if these 8 benefits are not 'obvious' to you, but you see how they can dramatically increase the commercial success of your ventures into mobile, I would strongly urge you to read my book Mobile as 7th of the Mass Media, available on all Amazon sites such as Amazon main USA site and Amazon UK site. It is also obviously available direct from the publisher, futuretext. But that book was requested by my readers, to explain why mobile is different from the PC and the legacy internet. Obviously it tells the story of how we do media like news, games, music, social networks, advertising and the internet on mobile (and SMS, mobile commerce etc). But many very senior industry gurus have called it my best book yet, if you're considering one of my books to read, please start with Mobile as 7th of the Mass Media. It discusses over 100 mobile media and service concepts, and even has 16 case studies of truly world's bleeding edge brilliance of doing magic in mobile.

WHAT NEXT?

So you have read through so far. Very good, its been a long and very fact-filled blog article, and you may even find yourself wanting to come back to it, where it may have had 'too much' info haha. Now you need a mobile strategy. Let me try to motivate you to consider that mission. Mobile is a Trillion dollar industry. Yes, the total mobile telecoms related businesses, selling handsets, the mobile minutes and SMS text messages, all our mobile content, and the network infrastructure that is underneath, that totals over a Trillion (ie 1,000 Billion) dollars in annual revenues.

Put that in context. The internet industry was launched in 1969 (internet is 41 years old this year) and is worth a little over 200 Billion in annual revenues (the mobile industry is 5 times bigger, even just 'mobile data' alone, is bigger than all of the internet). The computer industry was launched in 1943 (is 67 years old) and is worth about 300 Billion dollars (mobile is 3 times bigger). Television was launched in in the 1930s, and is worth a little under half a Trillion dollars (mobile is twice as bit). Radio as a broadcast mass medium is from the 1920s and is worth about 100 Bililon dollars (mobile is 10 times bigger). Cinema is over 100 years old and is worth about 30 Billion dollars (mobile is 30 times bigger). Advertising is about 200 years of age and worth under half a Trillion dollars (mobile is more than twice as big). Print came from Guttenberg and is thus over 500 years old, and worth - newspapers, magazines, books etc - about half a Trillion dollars (again mobile is more than twice that size).

Mobile telecoms launched in Japan in 1979 - the whole industry is only 31 years old and is far bigger than all of those, topping 1 Trillion dollars in annual revenues back in 2008 - when the industry was only 29 years old. Its a giant among all those, and more relevantly - mobile is growing FAR faster than any other industry on the planet. Even with the biggest global economic crisis of our lifetimes over the last 2 years, while all other major industries - and the global economy - shrunk - mobile grew user numbers, mobile grew traffic in minutes and messages, and mobile grew revenues - and mobile grew profits. Almost every subsector of mobile made money while the world economy 'cratered' - mobile advertising doubled in 2009 when the global ad industry and every other ad sector shrunk.

In our lifetimes there will be no better opportunity to make money than mobile is today. Mobile is the ultimate center of all digital convergence - fixed telecoms is migrating to mobile, the internet is migrating to mobile, all media content is migrating to mobile, advertising is going to mobile, banking and credit cards are going to mobile; even almost every other industry on the planet from policework to education, from car makers (the next internet is in cars, say carmakers) to farming, fishing and forestry.

MY TREE NEEDS A MOBILE PHONE

Forestry? (Now Tomi you have flipped...) Trees don't tend to call other trees. Trees don't send messages to other trees. Trees don't surf to the Playboy pages to look at pictures of naked trees. And more practically, trees don't go to the Weather Channel to see when the next rains are coming. Trees don't move around, even if somehow you could teach trees to talk, they they have zero need for mobile phones, they are rooted into one place, where they grow to full size in 20 years and then are felled by some lumberjacks for a death-journey to some sawmill.

Yeah, thats true. But go to Sweden or Finland and learn about forestry management in the countries of the highest computer penetrations, highest per-capita rates of engineers, the highest mobile phone penetrations, highest European rates of 3G telecoms, highest internet uses, and highest broadband uses and highest broadband speeds. And in that part of the world that is most tuned into 'green' values, where forests are never cut en masse, but forests are carefully 'maintained' where more trees are planted than cut, and from any forest, only the exact right age trees are felled. What does this region do with the most advanced forest management skills, tools and techniques, in the most ecologically responsible way?

They tag every tree with a GPS-GSM chip. Yes. Every tree gets a cellular mobile connection. Every tree. A million trees in a typical forest. Every tree is given a mobile connection. Each tree in the forest is individually tagged, so they can monitor it, and then that the right tree is cut at the right time, and after it is cut, that the right parts of the right tree go to the right sawmills. Not sawmill. Not singular. Sawmills. Plural. Yes, a standard pine tree produces different quality wood that typically is processed in 5 different types of sawmills, to optimize its utility. Part of the tree goes into high quality wood like furniture or sporting goods (tennis rackets, hockey sticks, skis, skateboards etc), other parts go into construction wood, others into newspaper, part goes into pulp etc. And whereas in say Canada or the USA often forests are just cut every tree flat, taken out to one sawmill, in Sweden and Finland the forests are never felled in total, so the forest remains vibrant while individual trees only are cut. And to manage this, yes they need the best technology. They will not attempt to 'wire' the forest with 'fixed telecoms' or 'broadband'. To do intelligent forest management, they use mobile telecoms - GSM and GPS - to ensure the right tree is cut, and after its cut, the right tree goes on the right truck, and then when that truck brings trees to sawmills, the right trees are removed from the truck to the right sawmill, etc.

MOBILE WILL CONNECT TO ANYTHING

Now think about this - if we can add commercially valuable utility to a tree - which does not 'phone' - cannot speak, cannot read a text message, cannot type. A tree which does not move about for 20 years, is literally rooted to one spot. If forestry management can gain commercial benefits out of mobile, then definitely ANYTHING you do, whether its for people or animals or any inanimate objects, your business can benefit from mobile industry today. Not just benefit - mobile has 8 unique benefits - you can definitely add new benefits to your customers today if you are clever with mobile. Like Holiday Inn Hotels in America right now this week, who have started to enable hotel clients to use their phones to operate the electronic locks of their hotel rooms. Brilliant, magical solution. Or like the farmers in Iceland and Canada who connect with their cows with an old Nokia phone hanging where the cowbell used to hang, and when the farmer wants to milk the cows, he sends an SMS text message to the lead cow, who hears the beep-beep, and knows its time to come home to be milked. I am not kidding. Farmers call the cows. This is a magical industry.

Mobile is so magical, there are services that let people hunt for ghosts and haunted houses with their phones (yes, obviously these are games but they make money on mobile). There are 'lie detectors' installed in phones, there are sensors we can install in our plants, so the plants send us a message when they need to be watered (I really need to get me one of those) and mobile will even let us connect with our dead relatives. Not that they will respond. But it started in Japan and is now spreading, where at cemetaries, you can have a mobile website dedicated to your dear departed. Visitors to the grave can use their phone to visit the memorial mobile website, see the pictures from the burial service, read about the person's history - and leave greetings at the spot, having visted the grave. I know it may seem a bit morose, but people do love this, as the close family will also see from the mobile website when a family member has gone to visit grandpa's grave, etc.

There has never been anything like mobile. It is the only device that is ubiquitous on the planet, even the wristwatch is giving way to the phone. Every economically viable person on the planet has a phone. There is a mobile phone subscription for two thirds of the planet already. The phone is the first thing we look at when we wake up and the last thing we see before we fall asleep. Its the only device to reach us when we sleep. We interact with the phone over 100 times every day, its present with all activities we do, one out of every seven media minutes has the phone with us. SMS text messaging is used by more than 2 times more people than email or any web service from Google to Facebook. SMS has more than twice as many users as total TV sets on the planet, there are even more active users of SMS than the total number of FM radio receivers on the planet. Every industry from media to banking to travel to retail to government to education to fishing and farming can use SMS. Mobile can be used to connect with people, with pets and farmyard animals, with household plants and trees in forests; mobile will even let us connect with our dearly departed. There never ever was anything remotely as powerful as mobile is today.

IS ONLY THE BEGINNING

And we are only starting. The mobile data innovation started in Finland in 1993 with SMS (my past mentor, Matti Makkonen invented SMS), and the mobile content media industry started in Finland in 1998. When I was still employed by Nokia, I wrote the first White Paper of any company in the world to explain how to do the internet on cellular networks. That was in 1999, the same year the world's first mobile internet service launched in Japan (i-Mode by NTT DoCoMo). The new parts of the mobile industry, the mobile data side - is barely more than a child, learning to walk now, before it starts to run.

The Apple iPhone revolutionized the mobile industry. After Apple joined mobile in 2007, we've seen total commitment of entering mobile from such global PC industry giants as Dell, HP, Acer and Lenovo (Toshiba was already there). We've seen Microsoft and Google greatly increase their involvement in mobile, Microsoft CEO Steve Ballmer just this week took the Microsoft mobile project under his personal supervision, that is how serious the world's biggest sofware company is about mobile. The big mobile ad agencies from LM McCann to Ogilvy to Saatchi etc are all now teaching their teams and their clients about mobile. The big media houses from TimeWarner to Turner to Publicis to Disney are all going gung-ho to mobile. Almost all major banks have recently made major mobile initiatives as have the major credit card companies. Car companies are eager to bring the mobile internet to their automobiles (20% of cars in South Korea are already connected to the web).

IT ONLY GETS FASTER

Today we are seeing several accelerators to this dramatic change. Yes. The past decade mobile became the world's fastest-growing giant industry ever. Now its getting faster. We see better phones - 'smartphones' which used to be luxury niches for the rich, but now there are smartphones that are sold for 100 dollars even (street price, without the handset subsidy and a 2 contractual obligation). Smartphones will shortly form half of all phones sold in the Industrialized World, and they are increasingly the first type of personal computer for the Emerging World. And we see 3G and faster networks, so mobile data services can bring richer experiences. The end-users, the consumers, have accepted the change of the phone from being a 'telephone' ie voice device, to being a 'data' device. And now the operators/carriers are expanding the offering of all-you-can-eat data plans (invented in Japan, today over half of Japanese consumers are on such data price plans).

Nokia told us in 2001 that it takes from 4 to 6 years for consumer behavior to take effect nationally, in mobile innovations. So for all that magic that was unveiled when the iPhone launched in June of 2007, we are only half way to the 'full effect' just of the iPhone! Yes, more changes due to the iPhone are yet to come, than what we have already seen. But the evidence is everywhere, Google's Android smartphones seem to be 'more like an iPhone than the iPhone itself' haha, and even Nokia is now releasing a true iPhone clone with its N8 model smartphone later this summer. Taptu started to classify a new type of web surfing experience as the 'mobile touch web' where clearly a touch-screen based mobile surfing experience (like on an iPhone) is distinctly different from 'older' mobile surfing on a T9 type of keypad. These are only the tips of the iceburg. 150,000 apps in the Apple iPhone App Store, yet another indication that there has been very intense innovation by masses of developers, in very short time. Now consider what that'll be like three years from now.

MOORE'S LAW RULES

Three years from now, your iPhone 3GS is 'two generations old' where normal global phone replacement cycle is 18 months. That means you've had time to get a new iPhone (or Android or Blackberry or N-Series or whatever phone you like) and hand your 3GS down to your eldest teenager child. And 18 months after that, you've had time to get your SECOND newer iPhone (or equivalent) and you teenager kid being bored with the iPhone 3GS, has abandoned it, gotten a newer smartphone, and has gifted your precious hot 2010 phone to your youngest 9 year old child.

Think about it. Three years from now, our N97 and Blackberry Bold and Nexus One and Motorola Droid and Apple iPhone 3GS will be so out-of-date, we hand them to under 10 year olds as essentially 'toys'. And Moore's Law still rules, computing power doubles every 18 months. So that discarded smartphone of today's vintage is still more powerful by all major computing metrics than the worlds' most powerful supercomputer was only 20 years before today, the Cray. Yes, in your pocket today you have computing power more powerful than all the computers used to create the hydrogen bomb. More powerful than the computers used to create the space shuttle. More powerful than computers used to create the nuclear powered aircraft carrier. And you will discard that power, and hand it to your under 10 year old kid in three years. (UK stats just reported in The Telegraph this week reveal that of the age demographic of 7 to 11 year olds in Britain, 79% have their own mobile phone. It will happen everywhere soon)

What will that generation do with their lives and careers. Imagine if Quentin Tarantino or Alfred Hitchcock or Salvador Dali or Leonardo da Vinci or William Shakespeare had a supercomputer as their childhood toy, a 3G smartphone with camera, video, music, gaming, messaging, the internet, etc. How will that generation thrive in the digital cyberspace of our near future?

When I was a child, we read in science magazines about the first supercomputers, videogames were at the level of Pong, and digital cameras had not even been invented yet. For messaging I bought a used typewriter and used carbon paper so I'd get a copy of what I had written with my pen-pals (I really did haha). If a kid wants to create an instant copy of a written page today, they snap a picture of it with their cameraphone.. Wow, a copier in your pocket. No matter what I saw on early episodes of the original Star Trek or Lost in Space or Space 1999 or Maxwell Smart's shoephone on TV, there was never any suggestion we'd have something akin to a photocopier in our pocket haha..

GET INTO IT NOW

This is the industry. Yes, microbiology will no doubt have great growth as will green energy etc. But no industry is so much at the center of all convergence as mobile. And mobile itself has already outgrown all its rival tech and media rivals. A decade ago yes, mobile was equivalent to the PC industry or the internet or TV. Today mobile towers over them. Mobile is one of only a handful of Trillion-dollar industries on the planet - and by far the newest and thus fastest-growing Trillion-dollar industry. You don't need to be Vodafone or China Mobile or AT&T to have a place in mobile. You don't need to build phones like Nokia and Apple and Samsung. You can enter mobile via SMS or MMS or WAP or HTML 'real web' or even perhaps by smartphone apps. There are still many great opportunities even in basic services around voice.

But whatever you do do, whether personally, or your project, or your team, or your department, or your division, or your corporation - please study mobile today. Set up a mobile task force to capitalize on this opportunity before your rivals beat you to it. This is the golden age of mobile. It is the best economic opportunity of our lifetimes. Did you notice that the world's richest man is no longer PC industry captain Bill Gates of Microsoft. This year for the first time the worlds' richest person is Mexican mobile telecoms tycoon Carlos Slim, CEO of America Movil/Claro, whose empire runs from Mexico through most of Latin America to Brazil and Chile.
 
Anyone who wants to quote any facts or data from this blog, that is not otherwise referenced, the source for all other data and facts is TomiAhonen Almanac 2010. You may of course refer to this article and quote from it at length at your blog or website etc. Just please include a link to here.

TWO ITEMS FOR YOU

This has been a very long article, to give you the basics, 'everything you ever wanted to know about mobile but were afraid to ask' and I touched on several myths in this article too. Thank you for following all the way to the end. Now what else. You may want to bookmark this blog, and tell your colleagues to come read it, if you found it useful. But you can't really carry this article in your pocket haha. So I have something almost as good. I created a 'Cheat Sheet' of all of the most important facts and stats of the industry, in seven tables of the most important numbers. Its only 2 pages in length, so it won't kill you. Its an unrestricted pdf file that you may freely save anywhere and share with all colleagues and friends - and you may quote from it in your future presentations, internal memos, etc. And yes, obviously its free. All you need to do is send me an email to tomi at tomiahonen dot com and ask for the 'Cheat Sheet' and I'll send it to you by return email.

Meanwhile, if you already know you don't know enough, and want to get deeper into mobile and want more than just the top line information, I have released my TomiAhonen Almanac 2010. It is intended as the comprehensive pocket resource 180 page eBook/mBook with 84 charts and tables, of all the major numbers and stats and facts of the industry. It will tell you how many mobile subscribers are unique users, how many have multiple subscriptions, across regions, etc. The Almanac tells you about the installed base of phones and their abilities, the migration rates to 3G, etc. It reveals stats on users, usage and prices of SMS; of all the different measures of the mobile data/mobile internet space and current usage levels by each definition; it has chapters on all major types of content on mobile, such as music, TV, gaming, news, etc; their users, handsets, revenues; mobile advertising users, revenues, and types; and all other major categories of the mobile industry including voice, business/enterprise services, mobile banking, smartphone apps, the infrastructure business, etc. There are national stats of the most important data points to 60 major countries, plus charts of the world's biggest mobile operator/carrier groups, the 25 leading countries by 3G adoption rate, and a whole chapter on the Digital Divide. And best of all, the ebook costs only 9.99 Euros and is available for you today to have on your phone or PC. There are sample pages inlcuding several of the charts and tables that you can see at the ordering pages here TomiAhonen Almanac 2010.

Faster than a locomotive, leap over giant buildings - yes, its... SMS! Text messaging has twice the users of email, twice the size of television

Mobile phone based messaging is 2.6 times as big by users, as email. Mobile phone based messaging has twice as many active users as the total worldwide population of television sets. And personal computers of any kind including netbooks? Mobile phone messaging is three times as big as the total global installed base of any kind of personal computer including netbooks. And this is not 'wireless email' no, nor is it 'twittering' or mobile 'instant messaging'. No, the most used mobile messaging system - that is, the most used data application on the planet -  is SMS text messaging.

This blog article is your mobile messaging primer updated for 2010. And I can now tell you for a fact, that nobody is safe. Even the last luddites will take to it. That uncle of yours who says 'never' - even he will be converted. We now have the evidence! Its about time to take a look at mobile phone based messaging for March 2010. This is another 'primer' blog posting, in other words its detailed and fact-filled, so it won't be short. Go get yourself a cup of coffee before we start.

SMS USED BY 53% OF PLANET

We've reported in the book and on this blog for many years already that SMS text messaging is the most widely used data application on the planet. Consider email. Email was invented in 1971, so it has had 39 years of life. In those four decades email has spread globally and has 1.4 billion active users today (said Netcraft Feb 2010). Note this is far more than the total number of personal computers in use worldwide, as obviously there are many who share a PC at home, or use one at an internet cafe or at work or the university etc. Still, in 39 years, email has achieved 1.4 Billion users which is 21% of the total population on the planet. Very impressive. In fact, email has more users than fixed landline telephones (at 1.15 Billion and in gradual decline). Did you notice that? More send messages than talk on a fixed landline worldwide. A very impressive achievement indeed.

Email was the first 'killer application' for the internet. It was a vital link in the expansion of the personal computer from the office to the home. It was the first reason why 'normal people' wanted to get an internet connection (and eventually was superceded as a reason to get online by search and browsing, and now social networking like Facebook, YouTube, Twitter etc)

That is our context. 39 years, 1.4 Billion users. Now take SMS text messaging. Mobile phone based messaging was invented by Matti Makkonen then of Telecom Finland (part of TeliaSonera today) and my former mentor when we both were employed by Nokia later in his career. Matti's invention was first technically used in the UK when machine-originated SMS were used for technical testing purposes in 1991. The first commercial and consumer use of SMS was in Finland on the Radiolinja GSM network (part of Elisa, another of my former employers). The first reported use of SMS to send a text message from one phone to another phone was by Nokia employee Riku Pihkonen, who did this on obviously a Nokia phone and the Radiolinja network in 1993.

So SMS text messaging is less than 17 years old today. Literally less than half as old as email. How has SMS fared? Spreading like wildfire, SMS became the world's most widely used data application. It was used by half of all mobile phone subscribers by 2002. That year SMS user number shot past the total worldwide count of email users. SMS hit one Billion active users by 2004 and two Billion active users by 2006. The juggernaut continued its relentless climb and by 2008 SMS had passed 3 billion active users (Ericsson 2009) and earlier this year we heard from messaging solutions giant Clickatell that SMS is nearing its 4 Billionth user (Clickatell Jan 2010). My consultancy, TomiAhonen Consulting measured the mobile phone messaging active user base at 3.6 Billion mobile phone subscribers at the end of 2009. That was 78% of all mobile phone subscribers on the planet. Towering over email, SMS has 2.6 times more users than email. The SMS user base is 53% of the total population on the planet.

Even the last 'laggards' are getting onboard, with for example over two thirds of Americans now active users of SMS. It was at 65% of US cellphone subscribers two years ago and growing strongly (Wirefly Apr 2008) and American consumers now prefer sending SMS text messages to making phone calls on their cellphones - another universal trend by the way (CTIA 2009). In advanced markets like Britain 87% of all subscribers send SMS (Carphone Warehouse 2009), China 90% of subscribers send SMS (China Mobile Sept 2009) and in Pakistan 90% of subscribers use SMS (Daily Times of Pakistan Feb 2010). In other "mid-markets" where SMS is not quite universal, it still used by the majority of mobile phone subscribers like in Brazil where SMS is already used by 79% of mobile phone subscribers (Acision Dec 2009)

HOW MUCH

Lets put this in numbers we can appreciate. The limit of a standard SMS text message is 160 characters (if you're familiar with Twitter, Twitter's limit is 140 characters). Now, the average user in the Philippines send 26 SMS text messages per day. If we assume the average length of an actual text message sent in the Philippines is 80 characters in length - half the full length - then the Filippino population produce that much new original text - by triple-tapping on their phones - that each average user would create a new book, yes book, in the number of words produced ...every four months. So every average Filippino writes that much on their phones, they're creating the equivalent of 3 new books every year. And thats not the heaviest users of SMS, no not by a long shot. Heavy users, older teenagers and young adults from the UK to South Korea to the USA have been measured sending on average 100 SMS per day.

If you send 100 text messages per day, and then you obviously would typically do that with friends who are also heavily into SMS text messaging, so you'd roughly speaking receive also the same amount - another 100 SMS text messages arriving on your phone daily - that means you're either reading or writing a text message every 5 minutes of all hours you are awake in the day (every single day of the year).

ADDICTIVE

SMS text messaging is a universal trend. It is proven to be addictive in university studies on mobile phone addiction from the Catholic University of Leuven in Belgium to Queensland University in Australia. Proven not just to be addictive, it is as addictive as cigarette smoking! (so there is absolutely no prospect of going back. Undestand this paragraph - SMS text messaging is proven to be addictive in university studies and as addictive as cigarette smoking - that means, that anyone who ever 'gets the habit' won't be able to stop). By the way, who was it who first told you in a book that SMS was showing signs of being addictive? Its yours truly, in my second book m-Profits in 2002. If you were around to read that book back then, and you bothered to follow up with my writing, you'd be a mobile messaging mogul and millionaire now (as some of my readers of course are).

As of this January the world was sending 12 Billion SMS text messages every day, which is half a billion messages every hour, or 9 million text messages every minute or 150,000 text messages sent globally every second of every day. Each of those is a paid or charged message. 150 thousand paid messages sent every second. To put it another way, this industry earns another million dollars of revenues - every 4.5 minutes

LETS TALK MONEY

So how big is it? SMS text messaging passed 100 Billion dollars in annual revenues two years ago and has now passed 113 Billion dollars in annual revenues for 2009. How big is that? For context, the global music industry is worth about 20 Billion dollars. Hollywood box office revenues are about 25 Billion dollars. Videogaming software income and console sales, combined, are worth about 40 Billion dollars. Internet based content incomes, such as paying for premium content like multiplayer gaming like World of Warcraft or Second Life, and various adult oriented services etc (excluding advertising income, so this is the directly paid revenues), is worth about 27 Billion dollars. Add all of those together, global music spending, global videogame spending, global cinema box office revenue and global internet content revenues and we are at 112 Billion dollars. SMS text messaging alone is worth 113 Billion dollars. And while music industry is in a death-spiral and most media are losing customers and losing a lot of money in 2009 when the global economy suffered, SMS text messaging revenues users by 11%, grew traffic by 27% and grew revenues by 7%.

Or to take another industry, SMS text messaging generates as much revenues as total worldwide radio broadcasting industry. Or closer to home for me, SMS texting alone earns more than the worldwide book publishing industry. That is a lot of money. And if we hark back to email, for comparison, internet based email earns less than 5% of what SMS earns. Yes, SMS text messaging is 20 times larger by revenues than email. The little brother has truly grown past its older sibling.

EVERYONE WILL USE IT

But yes, how far can it go? We all have that parent or uncle or boss who hates SMS (probably hates all mobile phones) and totally refuses to use SMS. It seems like there would be a part of society who will 'never get it'. For that, we now have absolute evidence. Research & Markets have just reported in February 2010, that Finland's total user base of SMS has reached... drumroll... 90% of the... drumroll... total... drumroll... ...population !!! Not 90% of the mobile phone "subscriber base", not 90% of mobile phone 'users'. In Finland SMS has now reached an active user base that is 90% of the total population!

Finland is where it all started, and now 17 years later, we are at the point where nine out of ten Finns are active users of SMS text messaging. Why is this such an astonishing number? We need to look at the total age pyramid of Finland to get its significance: 8% of the Finnish population is too young to finish first grade in school. So 8% of the Finnish population can not be expected to use SMS because they have not yet learned to read and write.

Now it truly gets astonishing. Yes, 92% of the total population of Finland have once learned how to read and write (Finland was one of the first countries in the world to reach 100% literacy, even the USA is not at 100% literacy). And now Reserach & Markets measures that 90% of the total Finnish population are active users of SMS. That means, that out of the population which is 'old enough' to know how to read and write, a massive 98% of that population uses SMS! That is truly a massive statistic. It is for all practical purposes 'everybody' because - in that last 2% who do not use SMS but who are old enough to have gone to school at some point, we have people with permanent disabilities that they cannot ever use SMS - they are either totally blind or 'legally' blind, and/or have amputations in arms/hands/fingers and unable to use a phone keypad. That last 2% includes those who have mental disabilities that they cannot learn to read or write. That last 2% includes the old and infirm, including those who are so old their eyesight cannot handle looking at a phone screen even with eyeglasses, or their hands are so hurt by arthritis they can't hold a phone. And that last 2% includes those who have reached those stages of old age like Altzheimer's that they can't remember people anymore and can't thus use a phone.

Yes, Finland is where it started and today, out of all people who know how to read and write, and who have the physical abilities to read, to write (and to remember), we have essentially 100% adoption of SMS text messaging.

I told you its addictive. And if so, it means it is only a matter of time before everybody will be doing it. If Finland is at this point today, you can be 100% sure, Sweden, Norway, Denmark, Israel, Singapore, Italy, Austria, etc are only a few steps behind. The rest of the world will follow. Every country it will become true, even in the USA and Canada, that every economically viable person who knows how to read and write, will sooner or later discover the immense power of mobile phone based messaging - and will use it. And then its only a matter of time before they become addicted to it.

GOTTA TAKE A BREAK

So, your young adult friend just excused himself or herself and went to the bathroom. Did you notice that the young adult took their phone with them? If its a public restroom like at a restaurant, and someone happens to be listening - they won't hear your friend talking on the phone, no. We don't take the phone to the toilet to make phone calls. No, we use the phone in the bathroom to read and send messages. We can feed our messaging habit privately without drawing any attention. Nobody gets to eaves-drop on the discussion. And if the phone keypad and other 'beeps' are set to silent, nobody will even know what we're doing in there. As to teenagers, they are brazenly willing to send SMS text messages to someone else while they are talking to you. I am not kidding. 48% of British teenagers admit to doing this, sending text messages simultaneously while carrying on a conversation with someone else like their parents, teachers etc (Carphone Warehouse 2006).

BUSINESS COMMUNICATION

Then we have those, still many 'luddites' in North America still, and occasional senior management in miscellaneous other laggard countries - where they wonder whether SMS is suited for business communications. This myth was destroyed early in the past decade in the UK, where typically very conservative British business executives discovered SMS and started to use it in business. Early statistics from the MDA (Mobile Data Association) reported that the majority of UK based executives used SMS for work - receiving as many as 40 work related SMS messages daily - and that British executives considered SMS their most valuable time-management tool. Think about it, the only resource a manager cannot replicate, is his own time. And if 'conservative' British executives felt SMS was their most valuable time-management tool, perhaps you should consider if this might be true.

Mobile phone based messaging is so powerful and necessary for modern high-speed management, that Barack Obama insisted he had to get to keep his Blackberry. That was in the Spring of 2009. Now consider Britain - UK former Prime Minister Tony Blair was using SMS in his government meetings back in 2004, five years before Obama brought it to US top government use. And how did Blair use it - he had approved the use of SMS during meetings, between Cabinet members, to allow them to communciate silently across the table - without disturbing the meeting. This is modern management. Not 'forbidding the Blackberries' as we still hear of some US CEO's decreeing - but rather to embrace the modern high-speed communications. Blair also had his Cabinet members use SMS to retrive data in real time from subordinates who were outside the meeting. But did Tony Blair invent this innovation? No. The Slovenian Prime Minister was using SMS back in 2000.

Why SMS, why not email? Think about it. How urgently do you respond to emails? 160 Characters measured in 2007 that we respond to email in 24 hours, but we respond to SMS in 5 minutes. How much faster is SMS? It is 288 times faster in response time than email! That is like comparing air travel speeds of a hot air balloon to a jet plane. SMS is the jet age of interpersonal communications. We have similar findings from 2008 that SMS is read and responded to within 15 minutes (Experian 2008).

SMS is the most discrete form of communication and it is the fastest form of communication. No wonder kids use SMS to try to cheat in tests. No wonder business executives use SMS in management. What started once as a 'teenager thing' has now reached the total population, every age of those who know how to read and write. And its not a consumer thing anymore, it has a valid place used in business the world over.

PREMIUM SMS

But the most widely used data application is not just a messaging platform for person-to-person communication. The first commercial or 'business' use of SMS was in Business-to-Consumer use, when Merita Bank of Finland offered banking balance alerts via SMS in 1995. We would see total banking solutions via SMS from the Philippines within a few years. Aamulehti the Finnish daily newspaper offered SMS based headlines from 1996. The first SMS-enabled vending machines were installed in Finland in 1998. Today most of Finland's vending machines accept mobile payments, the total count of such vending machines is past 1,000. Globally vending machine vendors are falling in love with the idea from Poland to Hong Kong.

1998 was the year the first paid 'premium' content was delivered via 'premium' SMS, which is also the birth of the 'mobile internet' or the 'mobile VAS industry' (VAS means Value-Add Services). That first paid premium content sold to the phone was the ringing tone, offered by Saunalahti (now part of Elisa) in Finland. A year later NTT DoCoMo would offer the first full 'mobile internet' service in Japan. But the first paid downloaded content to phones started here, in Finland with the ringing tone - delivered via premium SMS, twelve years ago.

In 1999 the first SMS-enabled mobile parking systems went live in Norway. In 2000 Finland offered the first SMS based advertising on MainosTV 3's mobile phone news headline service, totally free but advertising sponsored. 2000 saw the first use of SMS to pay for train tickets in Austria. 2001 brought us the first use of SMS based Check-in by Finnair. In 2002 we saw the first use of city public transportation by SMS when Helsinki Public Transport offered its tram and subway single tickets via SMS.

The list is too long for me to cover every example. Since then we've seen SMS-enabled payments of video rentals, lotteries, movie tickets, gym lockers, etc. SMS has been used to deliver alerts from libraries reminding you that your book is due, to hairdressers and dentists and doctors allowing you to book and reschedule appointments. SMS can be used to pay for the London congestion charge and is now used widely around the world for various charities such as relief after the hurricane that hit Haiti. Finland was the first country to adopt SMS as the nation's primary alert method for disaster communications and SMS has since been used across the globe to deliver national emergency warnings of anything from Tsunamis to the Bird Flu. And SMS 'notification' is legally binding as the required notification of a divorce in some Muslim countries. SMS acknowledgement is now legally binding as an electronic signature in contracts in Spain, and Estonia becomes the first country to accept SMS votes in a national election this year.

Some adoption numbers tell the tale in perhaps a more compelling way. United Airlines just announced that it is adopting mobile phone based check in, in the USA. A half dozen airlines in North America already do so (I believe Air Canada was first on that continent). But where they just are starting on this journey, we've seen mobile check-in in Europe and Asia for most of the decade, on airlines from Lufthansa to Japan Airlines to Norwegian. How about the leader? Finnair reported in 2009 that over half of its passengers, on its busy routes, use its mobile phone based check-in, which now includes multiple ways to access the services not just SMS, but also MMS, WAP and 2D barcodes (QR Codes). What of the public transport? Helsinki public transport reported in 2008 that 55% of passengers who bought single tickets on the trams and subway, used its SMS based tickets.

In Kenya, the SMS based banking services that launched only 3 years ago, have been so successful, that today 49% of all banking accounts in Kenya use mobile phone (SMS based) banking. Still, its not just Kenya. In South Africa you can get your total paycheck paid to you by SMS. In India the utilties like gas, electricity and water, will give you a 5% discount if you pay by SMS rather than by cash. Slovenia became the first European country where essentially every consumer payment could be done by SMS including taxis, restaurants, groceries, public transport etc. Parking was a particularly popular solution and I had ever more impressive numbers, until Estonia nailed the ultimate number - today 100% of parking in Estonia is paid for by SMS. No coins, no credit cards, no other payments, only SMS. They thus became the first country with the first (albeit small) industry - parking payments - that has cannibalized 100% of all other payment methods. SMS is the only way.

SMS AS MASS MEDIUM

What of content? SMS delivers news, entertainment, information and advertising - 74% of mobile phone subscribers in India receive SMS based advertising (Gfk & Limbo 2008). Worldwide in 2008 the total population of mobile phone users who received advertising passed 1.5 Billion recepients (Juniper Apr 2008). That was only 42% of all mobile phone owners at the time, but it meant that from 2008, more 'eyeballs' on the planet received ads on their phones than received ads in newspapers, magazines, the internet or even TV. And by far the vast majority of that mobile phone based advertising today is still SMS text messages globally. My consultancy TomiAhonen Consulting measured the total audience at the end of 2009 to be 1.8 Billion people which is only 39% of all mobile phone owners, yet is 50% more than the total global population of personal computers in use, including desktops, laptops, notebooks and netbooks.

Its not just media content delivered to the phone. SMS is used as a powerful interactive channel for older legacy mass media like TV, radio, print etc. 21% of UK television viewers vote regularly on reality-TV shows (M:Metrics 2006) which an impressive number until we go to Asia where we find numbers like India, where 44% of the mobile phone subscriber base has voted on a TV show using SMS (Vital Analytics 2009).

And while I have been an advocate, active user and student of SMS for over 15 years now, this messaging system keeps surprising me too.  SMS text messaging is the only mass media channel that will reach us in our sleep. Yes, we may fall asleep to CNN or MTV on the TV set - but that won't wake us up if something happened. It will just play in the background until perhaps we have the type of TV set that turns itself off after an hour or something. And the morning? We can wake up to the clock-radio beside our bed - and thus wake up to radio - but we have to set the alarm ourselves. Radio cannot turn itself on and wake us up. SMS reaches us when we sleep.

The Catholic University of Leuven study reported that 40% of all teenagers wake up to incoming SMS text messages occasionally. But that study was years ago and focused on teenagers. Now we have more astonishing numbers. Lightspeed Research surveyed the UK population and found that 67% of British citizens sleep with the phone in bed or by the bedside table (obviously using the phone as their alarm clock too). That is not an astonishing number (matches similar research from before) but this is - only 14% of the British population will turn their phones to silent for the night! So 53% of the British population sleep with their phone ringing on, and the phone in bed with them (Lightspeed June 2009). Very literally SMS text messaging is the only mass medium that can reach us while we sleep and wake us up in terms of an emergency or any kind of breaking news.

SMS WILL BECOME BIGGER THAN VOICE

And then we talk of our 'mobile' (or our 'cell') being a 'phone' ie mobile phone or cell phone. Yes, the 'phone' part of mobile comes from the fixed landline side, where what was originally called the 'voice telegraph' soon earned its own name as 'telephone' from the Greek as tele + fon, long distance talk. Its a talking device, a phone. Sure it is. Except what was true of the fixed landline, is NOT true of the mobile. I am trying to learn to call it a 'mobile' and not a 'mobile phone' or 'cellphone' for that very reason. We are seeing an increasing proportion of mobile phone owners, who do not own their device for its voice call purposes. They consider SMS text messaging as the vital feature of the mobile, and voice calls as an optional extra. We have global numbers on this already - Lightspeed Research tells us that globally 87% of the population with a mobile phone do not originate voice calls but do send SMS. They tell us that in the UK 11% of mobile phone users behave like this, and in the USA, 13% of cellphone owners do not originate voice calls while sending SMS text messages (Lightspeed 2009). In India the proportion is now 90% using SMS, and only 66% originating voice calls (Yankee Group 2007).

I am not saying that voice calls are ending. We communicate in different ways when we use voice, and when we use text messages. But there is a growing part of the total phone ownership who do not originate calls. If they don't use calls - we should not call it a mobile 'phone' should we? And of course, this is an economic opportunity. In South Africa Vodacom introduced their 'call me' service. A free SMS text message that can be sent by anyone to anyone. It only says 'call me' and it is sponsored by advertising. But if you are poor or something has happened and you are for example out of credit on your pre-paid mobile account - then send the 'call me' message to your relative or friend, and they will call you. SMS helps bring more voice minutes, isn't it a magical service?

MMS WORTH 29 BILLION DOLLARS

Thats just SMS. What of MMS? What is so often thought of as a 'failure' and a horribly bad end-user proposition of expensive poor quality 'picture messages' sent from one cameraphone to another - is actually a very potent and powerful media platform. In China for example, 70% of all MMS messages are sent by machine, not by person, in various media and advertising uses (ZTE Jan 2009). MMS is so powerful as a media channel because it offers simple standardized messaging-based delivery of video, sounds, pictures, and more text than SMS. And while only 13% of all the mobile phones on the planet are 'smartphones' - a massive 80% of all phones in use - 3.1 Billion of them - can receive MMS messages. Yes, MMS reaches the pockets of 6 times more people than all smartphones put together. If you are a media guy and like your iPhone, then even if we add all iPod Touch's and use the 'total shipped' number of 75 million since 2007 (even though not all iPhones will be used anymore as some have been replaced with newer models) - MMS reach of MMS-capable phones is 41 times larger.

And on MMS we can deliver videos, sounds, pictures and text. And MMS is interactive. Evidence of Chinese use include the Chinese newspapers, all of which now offer the twice-daily service of headlines (with pictures, video and sounds of the news headline items, obviously) that the branded newspapers offer in their MMS news headline versions? How popular? 39% of the total audience of the Chinese newspapers already subscribe to the MMS news headline services (Morgan Stanley 2009).

Yes, as every user of SMS is familiar with the mobile messaging format and how its paid for etc, just like SMS, MMS is also inherently interactive. For many non-technical users, if they receive a news headline on MMS, they often think "oh, this is a cool SMS text message, that has a picture on it, very nice". MMS is a most compelling delivery platform - optimized for small screen mobile interactive media use! Think about it, its everything SMS was, but has the enhancements for media. A kind of super-SMS. No wonder media brands who try it, totally fall in love with MMS. It is also optimal for almost any kind of advertising from coupons to 'engagement marketing.'

MYTH OF MMS FAILURE

MMS would be the biggest mobile success story ever, were it not stuck in the shadow of its phenomenally successful big brother we know as SMS. Consider. MMS is only 8 years old. Yet, it delivers over 5 times more revenues than total email revenues worldwide. And email has been around for 39 years. MMS alone is bigger than global music, global cinema box office reveues, or total worldwide internet content revenues. Yes, MMS was worth 29 Billion dollars in 2009 according to TomiAhonen Almanac 2010, and researchers are in total agreement that MMS is growing faster than mobile messaging overall. Portio Research already says MMS will pass 31 Billion dollars in 2010, while Research & Markets says MMS will pass 32 Billion dollars in annual revenues. But the most telling comparison of MMS is with SMS. It took SMS nine years to reach one billion users. It took MMS only six years to hit that level. For revenues, SMS passed 30 Billion dollars of annual revenues in eleven years, MMS passed 30 Billion dollars in 8 years.

Do not misunderstand MMS. It is not a person-to-person messaging 'substitute' to SMS text messaging. This was the common failure we as an industry made. I am guilty of it, I wrote of this assumption in my early books. We thought that SMS traffic would 'migrate; to MMS. That has been proven to be false and the industry soon learned. I chaired the first three global MMS conferences in Vienna and we learned really fast. Yes, we can send picture messages from one cameraphone to another. But MMS is far more potent in delivering media content.

And what a powerful media platform it is turning out to be. We see it on television where innovative broadcasters augment their revenues with MMS for example sending soap opera previews of tomorrow's episode - 5 minutes of tomorrow's storyline, delivered today after today's soap opera episode has ended. Why not? This is an easy way to monetize TV viewership? Or send cooking recipes or games or coupons or simple puzzles like Sudokus etc. MMS earns five times as much money as ringing tones - the first 'value-add' or premium content 'success story' of the mobile telecoms industry. Note, that ringing tones themselves are 4 times larger than all of Apple's iTunes sales worldwide. Yes, we all wonder with 'ooh and aah' how great the iPod success had been and how much money iTunes has been able to generate to the global music industry in digital music downloads. But ringing tones are 4 times bigger globally - and then MMS is 5 times bigger yet. MMS alone is bigger than all music sales worldwide. Why are we not celebrating MMS as an astonishing global success story?

NOBODY IN THEIR RIGHT MIND USES MMS

"But Tomi, I don't use MMS". Yeah, and older people in the Western industrialized countries - who tend to be most of the readers of our blog - are not the first to adopt MMS. That is true. But the numbers do not lie. We have statistics from all major countries and the pattern is the same. The growth in MMS is rapid and global.

How many are using it? In the UK 62% of all mobile phone subscribers already use MMS (Aenas 2009) and in the USA, 40% (Jagtag 2009). The leading European country is Norway where 84% of the subscriber base uses MMS (TNS Gallup 2009). That is not surprising, as Norway is where MMS was first launched. In Asia we have issues with wealth and in the poorer parts of Asia the handset population is not all cameraphones and not all MMS-enabled (yet) but even today in China 28% of the subscriber base uses MMS (China Mobile 2009), even in very poor countries we are seeing solid numbers like in India MMS is used by 24% (Yankee 2007).

How big is the user base? MMS has 1.7 Billion active users worldwide in 2009 or used by 37% of the total global mobile phone subscriber base (TomiAhonen Almanac 2010). This compares with 1.4 Billion email users, and 1.2 Billion total personal computers in use on the planet. Yes, you reach more devices using MMS than any internet-based services including search, social networking and email - combined - on the internet. In fact, as the world has 1.6 Billion television sets, MMS will reach a larger active user base, than the total of all television sets in use on the planet. That is enormous reach indeed. Or if we think back to newspapers, the global total daily circulation of all newspapers, paid and free, is 470 million. MMS has 4 times as many paying users than total global newspaper circulation.

The amount of traffic in MMS is modest, when compared to SMS, obviously, but Informa counted that the world sent 43 Billion MMS in the fourth quarter of 2008, which translates to 3.5 MMS sent per mobile phone subscriber per month on average, or nearly one per week. And that traffic is growing at breakneck speed. Portio tells us that MMS traffic is growing at 48% in traffic and 22% in revenues, this year. This from the second most used data application on the planet. For contrast, email grew a modest 7% in 2009 (Netcraft 2010).

Please do understand this enormous opportunity. The iPod was launched in 2001 and grew sales until about 2007 when it levelled off. The world sells about 40 million iPods per year. The total installed base is about 250 million iPods. The content on the iPod is the iTunes music and video market, which produces annual revenues of all types of iPod content at about 2 billion dollars globally. The iPod was the tech press darling for much of the past decade until Apple launched the iPhone.

The Blackberry is a loved mobile messaging device that is optimized for wireless email, and it has its Blackberry instant messenger service and it is supreme for sending SMS text messages. Blackberry has sold about 75 million Blackberries since its launch in 2001. About 35 million people subscribe to the Blackberry messaging services which generate roughly a billion dollars of annual revenues.

Around the same time MMS was launched in January of 2002, and today MMS has 1.7 Billion users (7 times more than iPod, 20 times more than Blackberry), and generates 29 Billion dollars of revenues (15 times more than iTunes, 30 times more than Blackberry). This is a supreme, sublime technology and messaging platform. MMS is not a 'failure' by any means, and were it not for the unprecedented global success of SMS, we'd know of MMS's gigantic global success and celebrate it more.

WHAT NEXT

A couple of follow ups. First, if you happen to be involved in politics or your business is near to it, like providing communication solutions or advertising etc in politics, this year 2010 we have several major elections happening from the US mid-term elections to British parliamentary elections etc. Please understand the power of mobile messaging in your election campaign and read my Primer on Mobile in Elections.

If you'd like a short 2 page free document to remind you of the main facts, numbers, and stats about SMS and MMS, I have just rewritten my "Thought Piece" on mobile messaging, with 2010 updated stats and numbers. I like to think that everybody, even the busiest manager, has time to read 2 pages. So its yours if you ask for it by sending me an email to tomi (at) tomiahonen (dot) com. Ask for the Thought Piece on Messaging and I will send the pdf file to you by return email. You can freely forward it to all your colleagues who wouldn't have the patience to read this type of long rambling Tomi Ahonen blog articles haha.

And if you want the facts of mobile overall, including obviously all the SMS and MMS related numbers and facts, please consider my TomiAhonen Almanac 2010. I have sample pages and sample stats at the ordering page.

For Your Eyes Only - the three levels of customer behavior based data

I had a lot of good discussion based on last week's blog story about our digital leash. I discussed how classic 20th century marketing research data concepts like 'demographic' data is becoming useless when compared with far more powerful 21st century behavior based data, collected from digital channels. And I argued that mobile is by far the most powerful of those digital means, in capturing behavior based data.

DEMOGRAPHICS VS BEHAVIOR

To be clear, demographics were a great data collection purpose in the last century when marketing was crude, the targeting very weak and we used mass media broadcasting 'propaganda' to try to reach our target demographic audiences. That was the best we could do in an analog age of print, cinema, radio & TV. WIth digital media (starting with the 6th mass medium of the internet) we go early steps into capturing actual behavior based data, and with this, suddenly the ability to do far more powerful targting. I explained this two weeks ago in my Amazon book recommendation 'advertising' blog. TV or radio or newspapers can never ever hope to get the accuracy and power of what Amazon does routinely in making recommendations to us. The ads are so powerful, almost nobody thinks of Amazon book recommendations as 'ads' and nobody would want to skip them or avoid them. In fact we hope to see that in all aspects of our commercial life - why can't we have recommendations for x or y like we have for Amazon in books..

Demographics makes assumptions on our demographic data - and massive errors that come from this generalization and stereotyping. But Amazon is based on actual consumption (of us, and then mapped against the patterns of millions of Amazon consumers across the planet). Before we could measure individual use, it made sense to try to 'group' customers based on some mechanics like demograpics (and in business, by industry classification codes, what is essentially demographics for B2B use) and then psychographics - barely more than the same. Demographics would look at a 42 year old married mother two kids and make the assumption that she's interested in 'mother' and 'home' types of things, not interested in 'youth' things like partying and going out at night. Now, while her demographic profile honestly can be 'married' and she may technically be so - what if she's going through a divorce (which won't take effect for many months) and is suddenly experiencing the dating scene, looking for a new boy friend. She's behaving like a teenager or young single adult. If we use demographics, we make massive mistakes. If we measure behavior, we get the reality.|

MOBILE BRINGS THREE LEVELS 

On digital media, like the internet (and this includes of course any 'real internet' 6th mass medium consumption on smartphones ie the 7th mass media platform of mobile telecoms) - we can get to the first level of consumer behavior data - what we consume. On the internet this consumption info is almost always only limited to individual merchants (ie Amazon can't tell me what I like on the BBC for example, the Guardian can't give me recommendations on Disney etc). But like we see on Amazon, the recommendation engine is a huge leap forward in customer insights. Amazon would not (should not) bother to collect demographic data on its customers, because behavior is so much more poweful and actionable and accurate data. Obviously any mobile data service consumption as at least as good as data, as any internet consumption would be. On mobile it can be 'apps' like fashionable now on smartphones, or it can be the 'real internet' or it can be the 'mobile internet' (which is not the same as the 'real internet' on a phone) or it can be other digital services and solutions and content from multimedia content delivered via MMS messages to basic news headlines via SMS to music such as ringing tones, various ads etc.

CONSUMPTION DATA IS BASIC LEVEL

The first level (basic level if you will) of consumer behavior data in digital is the 'Consumption'. For most in marketing, this is at first glance 'the ultimate' data, isn't it. Thats the 'holy grail' isn't it. If we know Tomi consumes Pepsi and not Coke, this is VERY powerful marketing data, isn't it. Are you Mr Ahonen now suggesting something 'beyond' this, something... even better?. 

Yes I am. Looking at consumption, is like primitive humans looking at the sky and thinking the world ends after the clouds and the stars and sun and moon are the limit of the universe, that revolve around us (as it seemed from that vantage point). Obviously we now know there are stars beyond what the eye an see, and many of what look like stars, are in fact galaxies consisting of billions of further stars, countless of which have their own planets and moons etc... Yes, that is the degree of sophistication we are talking about. To focus on consumption is the earliest 'cave man' level of this marketing insight haha..

COMMUNICATION DATA RELATED TO CONSUMPTION IS FAR MORE POWERFUL

The second level of Customer Behavior market researh data comes with Communication. Previously with any communication technology and media consumption technology, there was no way to connect the two. We had our letters and postcards, our telegrams and (fixed landline) telephones. None of these delivered media content (to any significant degree to mass market consumers). And we had our books, magazines, newspapers, cinema, radio, recordings and TV. None of those had a communciation channel.

That changed with the 6th mass medium of the internet, which started life not as a media channel, but as a communication channel (originally with email). The internet was communication first, and media later. And now that the internet has figured out a way to combine the two - we get 'social media' ie Twitter, Facebook, YouTube etc - and we suddenly get 'inherent' ways to combine communication with media consumption. What do I mean? I mean that when we combine consumption with communication, we get recommendations, we send links to interesting media pages - embedded into our emails. And we offer comment threads in media pages.

If you think 'social media' or 'digital communities' or 'user-generated content' or 'web 2.0" is 'big' so far - we have barely scratched the surface! Five years ago YouTube and Facebook were nowhere. Twitter is essentially a two year-old phenomenon. CNN's i-Report is 3 years old, etc. We have barely started on this journey of the 'convergence' of consumption and communication.

So to customer data. What do gain from the communication 'dimension' to our consumption? We gain all that we associate with 'viral' marketing. We can find out who is talking about our brand, good or bad. Who sends links to our site, who is generating buzz about us. It does not 'preclude' or 'invalidate' the consumption data, but the 'communication' is far more powerful for anyone in marketing research. One person bought our brand, did not talk about it. Ok. Another bought our brand and talked about it. Better. A third person never bought our brand but likes it and talks about it - wow. This kind of real customer insight can NEVER be captured in 'consumption' data - because this customer has not (yet) bought our product but clearly loves it (or hates it..)

Where can we do this, capture, this, utilize this? This is 'cutting edge' market research data, and for the most part we can find it in separate discussion channels like Twitter. Facebook, blogs etc. So while both exist on the internet - we buy a book on Amazon, we then mention it on Twitter. Mostly the two are 'co-existing' on the internet but not part of the same consumption or communciation. It can be - we can perhaps gather it to our own branded website, perhaps a 'fan club' etc. We have paid services on social networking sites like the massively multiplayer farming games that are the big rage on Facebook for exmaple. Any smart brand in digital, and those consultants and experts and agencies advising the brands - will want this 'dialog' with the consumers. It is central to 'engagement marketing' which moves the advertising/market communications beyond the mass market 'propaganda' preaching of the past century.

But also understand, that the 6th mass medium internet is incapable as a platform to deliver this type of insights across all services and all consumers. We can have the dialog and capture it, but only like Amazon and Facebook, we can do it within one brand or one channel like Twitter or YouTube at a time. Not across all users and all services. On mobile we have for the first time the opportunity to capture all consumption and communciation data, potentially (when currently collected by the operator/carrier, subject to permissions etc..).

THIRD DIMENSION IS CONTEXT

This is part of what hit me when we discussed my blog from last week. We are now witnessing the birth of yet a deeper level of insight. Understand the power of this. Amazon recommendation engine is inherently more powerful than TV or radio ads in selling books (or DVDs, CDs etc). Consumption data is more powerful than demographics or psychographics. Then we have communication of consumption - far more powerful, because now we see true influence (potentially, when well data-mined and with good data). Now we have something even more powerful. Again I am not suggesting to abandon consumption data or communication data (but I am saying throw away demographic data, obviously, as obsolete, not just useless, but counter-productive data!)

The third dimension is the 'Context' of consumption. That was at the heart of the examples I talked about last week. When we will gain the ability to collect accurately the 'social context' of our consumption - and various other 'context' elements such as time, location, proximity - we get FAR more powerful tools. Please don't mis-undestand me. I do not mean 'location-based advertsing - which is a very very bad and discredited idea. I mean like in my blog, what of the patterns of where I am, in relation to others. How I move. But also time, proximity, and yes, communication and consumption.

Here is a perfect example, valid today. Your mission is to find real - loyal - viewers of American Idol. Find actual contact info for as many of them as is humanly and technically possible today, with any means that exist.

You could set up a Facebook page. It won't get anywhere near all loyal viewers. You'd be lucky to get 10%. You could measure those who voted for American Idol - yes this is far better, perhaps a third of the audience. You could try various 'traditional' market research tools, interviews, the Nielsen ratings system etc. Nowhere near the chance to find the total audience. No way. And trying to all 'every household' in market research surveys would be astronomically expensive. You'd end up with only thousands of respondents and then like in decades gone past, you'd have to make statistical estimates on this 'sample' data. No, I mean real actual viewers of American Idol, just like Amazon has actual buyers of my books..

ONLY MOBILE GETS CONTEXTUAL DATA

But what if you took actual SMS text messaging traffic generated during the broadcasts of the show? 78% of the owners of mobile phones worldwide are active users of SMS text messaging. Even in America its past 2/3 of the cellphone ownership. And 91% of mobile phone owners keep the phone within arm's reach 24 hours a day, so we have our phone always with us, when we watch TV. Many - not all but many - who watch a given TV show will like to share that experience with close friends. This is a growing global trend. And when do we discuss our fave show - it used to be we called our friends after the show. Now its more and more likely we send SMS text messages to our friends during the show. Any kind of TV, whether its a soap opera or the big game of tonight or something on Letterman or the news. The sending of SMS during TV shows is even more so with reality TV shows that feature TV voting, like American Idol. If we measured from the phone networks, every consumer who has a texting 'pattern' to send (and receive) within a given 'circle of friends' (ie a digital community) messages during the TV show, we find a distinct group. When we extend this to see who then communicates with others, and do this nationally, we'll find millions who are part of this group.

I am not suggesting this will get us 'all' viewers of any TV show. I am suggesting it gets us the biggest actual personal identification of an audience. In the case of reality TV, roughly speaking we'd probably find half the total audience this way. FAR FAR FAR more than by any other means available.

Note that we did not need to 'read' the text messages for 'content' (like say Gmail does). We didn't need individual members of our audience capture, to 'consume' the content (ie vote on the show). We 'caught them' based on their context of consumption - who they shared with, when mapped against time and communication. We didn't need location information. Now we get easily over half of the actual total viewers in any country, who truly are loyal passionate fans of the Idols show. Whether you voted for the show or not...

Undrestand how powerful this is. On Amazon, you have to be online to be 'captured'. We get you from watching TV my way. On Amazon you have to consume 'their' content - buy a book or look at a book page. On mobile we capture - television viewers. Yes, we can capture also mobile content consumers (who used a phone for Twitter or Facebook or YouTube or downloads a ringing tone or goes to the Weather channel's mollie page). Amazon and the internet cannot get us audiences on other media - only mobile can do that! We can use mobile to capture an audience on TV (and if done cleverly, audiences on radio, the cinema, newsappers, magazines etc)

This is super-power 'bleeding edge' marketing research. This is the 'future' of marketing insights. This is where the big money and big commercial opportunities will be made this decade. Here is the real power where we need to deploy and develop in data mining. NOT to seek demographic data. That is pointless. Its as useless, obsolete info, as is the study into the efficiency of carrier pidgeons as communications tools today haha..

WINDOW IS NOT OPEN FOREVER

Now, the data today resides only in mobile phone networks (we can't get this data from fixed landline networks because the fixed landline phone is not personal - the whole family uses it - or more likely than not, the whole family today all refuse to answer the ringing of the home landline phone as they know the call is not for them personally haha). Same is true of the internet, because of firewalls, shared computers, deleted cookies etc, the sixth medium internet cannot deliver the personal data of consumption, communication and context - on a national level obviously - as we only can get from mobile phone 7th mass medium consumption.

So, today - 2010 - the handset maker (Nokia, Samsung, Apple, Blackberry) does not have this ability. The internet brands (Google, Yahoo, Amazon, Facebook) do not have this ability. The media houses (BBC, CNN, Sisney etc) do not have this ability. The banks and credit cards and loyalty card schemes do not have this. The only entity that can gather the full picture of Consumption. Communication and Context today - is the mobile operator, and in advanced markets like Scandinavia and the Baltics, Japan, Singapore etc, the operators/carriers already are deploying the technology to do this deep level of data mining. But they have almost no tools or skills or abilities to monetize this opportunity. Why? Well, a big part of that is because mobile is so far ahead of the curve that most top-trained 'Ph D' level brand name marketing professionals and gurus still talk about the supposed value of demographics and psychographics and have not been brought up to the speed of how much more we can get out of mobile.

WILL EVOLVE AND IMPROVE FAST

But marketing is a global competence and adapting and growing fast. The giants like Google and Apple and Nokia want to get into this space. The big mobile operators like Vodafone, China Mobile, Telefonica etc are slow to capitalize on it but are trying to. And the various ad agencies from the Ogilvys and Saatchis and McCanns are hungrily studying this space. Today that data collection is at the mobile operator exclusively, through essentially its billing system, but that will not last. There are too many 'outsiders' who are seeking alternate ways to this info. The smartphone revolution is a big step into that direction. Soon we will get at least part of the data off the phone, bypassing the operator billing data. 

So one, this is a blog to wake up the marketing, advertising, media, social networking and market research companies, to understand how much more data we'll be able to get to, when we abandon obsolete demographics, start with Consumption, and add Communication and Context.

But secondly, this is a warning blog to the operators/carriers. Don't fall asleep on this issue. You have to move NOW - because this ability is not going to remain exclusively yours. The market 'window of opportunity' will not remain open forever. It will close. You have to set up your ability to educate the marketing industries in your markets, provide accurate, actionable info into your customer base, and help grow this market - which will be measured in hundreds of billions by the end of the decade - or else you will be bypassed. 

I have more bubbling in my head about this topic - I will also develop a few concrete examples for our readers to make more concrete these examples. This may be a bit too 'theoretical' as a blog for now, but I want to get this thought out there, to add to the discussion from last week. Stay tuned, and please do leave comments if this triggers thoughts.