Sweden Says: Mobile Greed Will Kill Us

STOCKHOLM, April 23, 2008

More than 50 leaders from Swedish mobile operators and technology developers gathered at the Mobile & Broadband Showcase at Kista Science City, a thriving hotspot of ICT innovation outside Stockholm, for a Yankee Group discussion about issues and opportunities in the Anywhere Network™. Thought leaders joined us from:

  • Squace: Days away from launching an innovative browser interface for the smart phone
  • Mobile Sorcery: Building a navigation solution for vision-impaired Swedes with a combination of GPS, inertial technology and software to provide audible location and directional information to the pedestrian
  • Appear Networks: Providing a carrier-class development environment for enterprise mobile applications, including solutions used in the Dutch national railway, the Paris subway and more
  • Aptilo and Hulu: In the heart of GSM-land, in the company of Ericsson leaders debating even the characterization of WiMAX as "fourth-generation" technology, two firms pushing 4G forward
  • …and many more. For a quick virtual tour of what's happening in the region, visit www.kista.com.

In one of the most advanced and vibrant environments for mobile developments—where mobile penetration passed 100% 4 years ago—a sense of portent was palpable. Said one participant: "Most of the technology components havebeen ready for a while. Now that the network is there, and the consumer understands some of the potential, mobile services are finally ready to happen in a big way."

But while Yankee Group was looking to uncover further imaginative applications of ubiquitous connectivity—and certainly found them—that was old news to the group. They dutifully listed the mobile services they believed would be most successful: RSS aggregation, push e-mail, SMS-based activities, video and other forms of entertainment, location-based services, and user-generated content such as social networking. What these leaders really wanted to talk about, given the potential immediacy of large-scale adoption, were the frustrating remaining obstacles. What they see holding things back:

  • Pricing: "Consumers won't pay high rates for broadband on one device when it's now quite economical on another…At a minimum they need a predictable expense, not a variable one."
  • Lack of open, standard APIs and roaming: "I don't always stay in Sweden. My enterprise customer's employees don't stay in Sweden. But trying to organize a seamless mobile app experience from country to country is still too hard."
  • Fragmented development environment: "Enterprises won't deploy mobile applications on a larger scale as long as there is so little clarity about which platforms to use."
  • The lack of successful shared business models: "Someone needs to sit the operators down and explain that greed will kill us all. They can't take as large a revenue share from services as they'd like; it will stop the offers from succeeding or keep their partners from succeeding. Then no one wins."

At Yankee Group we've been analyzing mobile data enablers and barriers since the first text message was sent way back in December 1992. This Swedish group's frustration with standards, roaming and development environments is certainly not new; progress remains slow on each of these. But there's a bright side to the pricing and business model issues. Let's take pricing as an example. The operators have received much criticism on this issue, most of it justified, but they are now fixing the problem. Most European players already offer flat rates for laptop-based mobile broadband and phone-based mobile internet browsing. Some usage restrictions remain, but these companies have taken some giant steps in the right direction—better late than never, we say.

We also spent some time imagining future connected devices, from my umbrella to the fishing float issued by SK Tel that sends water depth and temperature to a fisherman's mobile phone. "Which connected devices will succeed in the next 5 years?" I asked. 

"What can be emptied can benefit from being connected," said one participant, meaning batteries, gas tanks, and, yes, refrigerators, all of which could tell the network they need intervention. "And what is measured or monitored must be connected," added another, suggesting that the network adds value to anything that benefits from knowing its location, its energy consumption or its health. "All my keys," shouted one participant while he rattled them for us. "I want to replace them with a networked security solution!" 

A few words to the wise came through:

  • "Let’s dig where we stand." These were the words of one participant, who meant that we should not be looking to blame operators or reluctant enterprises, as long as we're each able to do something on our own to move things forward. Ask not what ubiquitous connectivity can do for you…
  • "Good enough" is the enemy of great. Could the network operators build very precise, richer location-based applications than Google's applications riding on top of the network with no access to the network's intelligence about location? Yes. But if they take too long to do it, the more important question arises: Will users give up a satisfactory free service for one that's better, but costs more? No. For those who doubt the answer, I refer you to Pradeep's Principle, a bit of wisdom we gathered during our Anywhere Tour. But LBS deployment looks to be hampered by the slow roll out of quality support (the April 2008 Yankee Group Note, A-GPS Finds Its Place as Leader of Wireless Location Technologies, has more on this).

One person's "free" service is another's "advertising-funded" service. Blyk's recent success in the UK—it just passed its objective of achieving 100,000 members an impressive 5 months ahead of schedule—provides more evidence of the transformational impact advertising will have (more is revealed in the Yankee Group Note, Blyk Can Transform the Communications Industry). In the future, for those customer segments advertisers want to engage, the notion of paying for communications services (voice/SMS) on a mobile phone will seem as ridiculous as paying for a Google web search today. Welcome to the world of Anywhere Advertising.

We have much more to say on the matter. Keep an eye out for an upcoming Yankee Group report on the future of the open mobile network—why, how and when the mobile ecosystem will unleash its full potential.

April 2008
Emily Green and Declan Lonergan