Here's a quote from my earlier post on the subject.
"In Conclusion... My gut feeling is that Android will come close to iOS on engagement but we need to give Big-G some time. Will it surpass iOS on engagement? I don't know; I feel doubtful. The reason is that the iPhone and iPad are premium products and typically bought by more affluent customers. While Android is the mobile OS that powers high-end smartphones, it also powers very low-end smartphones. This waters-down the premium effect for Android customer-base." Like it? Share it!
I've been thinking about the Mobile Payment industry quite a bit over the past 6 months. I read industry analysts talking about 2012 being the year of Mobile payments, which to some extent has and hasn't held true. However, 2013 is supposedly the real deal. So lets get started and check out what's available to consumers and vendors from the mobile payment industry. There are a couple of technologies that convert your smartphone into a mobile wallet. Several Smartphone manufacturers, including Samsung, have included the Near Field Communication (NFC) chip in their phones, however, to use the NFC technology to power your mobile wallet, vendors also need to accept payments via NFC. Vendors who do accept, usually do so through their point-of-sale (POS) machines, which also have the NFC chip. Without vendor adoption of NFC, the technology can't scale. Don't get me wrong. NFC is here right now. Go out and buy yourself an NFC-enabled smartphone (Samsung Galaxy S IV), enter your credit card details in the mobile payment app and you're ready to leave your wallet at home. Once again, you can only use your new NFC-enabled mobile wallet with vendors who accept NFC payments via their NFC-enabled POS machines. Even within the NFC-enabled mobile payment industry there are several players. Google's Google Wallet initiative lets you pay with your Android phone with the credit cards you've stored on the Google Wallet cloud. Visa and Samsung have teamed-up to bring NFC payments to consumers. Similarly PayPal and NCR have established a partnership to increase adoption of NFC-based mobile payments. Most of the NFC payment players are pushing for wider adoption of the technology. In addition to the above mentioned names, MasterCard's PayPass initiative offers consumers to search for NFC-enabled vendors, thereby making it easier for consumers to use their virtual wallets. With heavy weights from the traditional payments industry and from the new generation of tech companies coming together, the install-base of NFC, both on the vendor and consumer side, will get a big boost. IDC forecasts NFC-related mobile payments to makeup 25% of the mobile payment market by 2017.
An alternate technology to NFC to facilitate mobile payments is software-based; the kind used by Square, LevelUp, PayPal Now, GoPayGo and even Bank of America. These companies use a combination of software and dongle or software and QR codes to facilitate the transaction. These players put the power of their respective app distribution and vendor signup solely into the hands of the vendors and the users. No third party POS machine manufactures and no NFC chips needed. Remember NFC is a hardware based technology that needs to be installed at the user and vendor ends which make it an expensive proposition to develop critical mass. The likes of Square, on the other hand, can scale up more easily on the back of existing infrastructure. The industry is anticipating Apple's entry into the mobile payments arena. With its large install base of iOS devices and credit card on file in iTunes, the industry is expecting Apple to make a splash. At the moment Apple's Passbook is basically a mobile wallet-like non-payment feature on the iOS. It's a skeuomorphic digital organizer and virtual storage for your boarding passes, movie tickets and loyalty cards. Tech pundits have prophecised Passbook's foray into a full-blown mobile wallet for facilitating payments since Apple unveiled it back in June 2012. What kind of technology will Apple employ once it jumps over the fence to enable passbook as a payment platform is yet to be seen. Apple usually doesn't make hardware add-ons on its devices until it foresees wide market adoption. I don't see Apple employing the NFC chip as a wireless payment facilitator due to the technology's low adoption rate currently. But that may change though given the push for NFC adoption by incumbents. The Cupertino heavy weight has over 400 million credit cards on file in iTunes.
Source: Horace Dediu, Asymco We can assume that once Apple forays into the full-blown mobile payments, it'll leverage iTunes to cover the first steps of mobile payment setup on the consumer side. Another ace up Apple's sleeve is its iOS install base which stands at 500 Million; a number spoken by CEO Tim Cook at its Earnings Call on January 23, 2013. Of the 500 million iOS devices, approximately 60% are running iOS 6.x. Through subsequent iOS upgrades, it can make a large proportion of iOS devices out there into mobile wallets with the help of the credit cards already on iTunes. To do this, it has to employ Square's concept rather than NFC. Sure, Apple can use NFC for newer devices, but not without rendering the older generation iPhones and iPads completely useless in terms of mobile payment due to lack of hardware...that huge install base goes out the window. Coming back to Square; it has hit a run rate of $10 Billion worth of payments processed. Square is going after the SME and Mom-n-Pop stores in terms of payment acceptance (vendor-side), albeit the partnership with Starbucks. The company named after a shape which also signifies settling a transaction, to 'square up,' has a vendor-side-only solution as well as a vendor and consumer-side solution. It started off with the vendor-side offering with a dongle. The dongle is basically a credit card reader that plugs into an iPhone, iPad or Android devices's headphone jack (no pun intended Dorsey). It allows anyone with an iOS or Android device, the dongle and a square account to start accepting credit card payments for a monthly fee or 2.75% per transaction fee.
Having a garage sale? Use your smartphone to accept credit card payments! There are obviously too many players using a handful of technology standards vying for the mobile payment market. Consumers are probably confused and have to sign up for more than one offering due to the fragmented payment acceptance space. To add to the clutter, e & m-commerce sites have their own respective payment fulfillment. If I am shopping on Amazon or eBay, I have to use Amazon's checkout facility or eBay's PayPal solution to complete the transaction; I can't use Square or Google Wallet. Mobile commerce is getting bigger; 29% of U.S. mobile users have used their mobile devices to make a retail purchase and Bank of America predicts mobile retail commerce to reach $67 billion in Europe and the U.S. by 2015. Mobile payment companies want to facilitate the transactions behind these big numbers. It doesn't end here. Carriers are also jumping on to the bandwagon. Carrier-based digital payments are particularly popular in developing nations - consumers can use the SMS platform to send payments and pay bills. The carrier fulfills the transaction. Every player is going after its own market. The one that gains critical mass on both sides (simultaneous vendor and consumer adoption) will be the one that scales exponentially. Hopefully some sort of consolidation and partnerships between payment facilitators and vendors will help organize the industry and make it easier on the consumer. 2013, we are here! Like it? Share it!
I just had to share this. The 3Doodler is a 3D pen with which you can draw and write out of thin air. Don't believe me? Watch the video. Its basically a 'free-hand' version of the 3D printer. It's great for kids and for designers. You can pick one up on kickstarter for $75.
This is a kind of part II of my earlier post about the 3rd Mobile OS. If you haven't read it yet, you can do so here. The gist of the post is that the next generation of mobile OSs will converge the smartphone, tablet and TV from an OS perspective. While the smartphone and tablet are 'half-way' integrated due to various synching solutions through the cloud, its the inclusion of the TV that's going to bring all your screen sizes (smartphone, tablet & TV) under one ecosystem. We've been hearing about the 'Second Screen' concept for some time now. Second screen is the practice of using your smartphone or tablet while watching the 'tele.' The smartphone is used as a medium to facilitate the 'water-cooler' behavior; TV fans conversing about the TV show or sports game on social apps (twitter, facebook, etc.) while watching the show or game. The water-cooler effect is not the only behavior within the second screen industry. TV viewers look-up information about the show or the actors while watching the show. We can also look-up clothes, shoes, accessories that the actors are wearing on the show, thereby showing purchase intent. There are apps for some of these second screen behaviors. GetGlue is an app for spurring conversation about TV, movies and sports; in other words, a social TV app. Twitter is a popular second screen app. In fact Business Insider posted a twitter slide deck that shows 60% of UK Twitter users use Twitter while watching TV. And 90% of online social conversations about TV are on Twitter! Speaking of Twitter, the 140-character micro-blogging site recently confirmed its acquisition of Bluefin Labs. Bluefin has basically developed a tweet analyzing engine; a technology that mines social chatter about TV. Why acquire Bluefin? Twitter, being on the forefront of hosting social TV chatter, wants to slice n dice this information, organize it without revealing your identity and provide it to the ad tech industry. Another social networking site (starts with the letter 'f') is extremely interested in social TV as well. All of this brings me back to my post about the 3rd Mobile OS. Converging all three device categories under one OS umbrella will be a boon to the second screen industry. Lets take the Google-Android scenario. As I mentioned in my earlier post, since you'll be logged into your Android account across all devices, you will be able to watch your favorite streaming TV shows on the big screen while using your smartphone with the same login credentials. Google will be able to track your activity across all devices while you use them simultaneously. Imagine Google being able to track the fact that you are looking up a pair of jeans you saw the character wearing on the show you are watching at that moment. Thereafter Google can show you ads about Jeans because its algorithms figured out you are interested in purchasing a pair of jeans you saw on a TV show. Imagine an 'Inbox' of ads on your Android account that you can access from your all your devices. You control what you want to see in your ad inbox. An ad inbox deeply integrated with your Android-Google account that displays ads in a simple yet elegant design; something like a pinterest for specific, specially targeted ads for you. You definitely don't want the ads to be intrusive, so the ads won't show up on your TV will you watch your streaming shows. However, you can hit the pause button and the TV screen switches to an interactive ad billboard, featuring the ads from your ad inbox in a pinterest-like layout. Advertisers can promote their ads by bidding higher on the ad tech marketplace The ecosystem will allow 3rd party players from within the ad tech industry to plug in and access device activities which allow 3rd party apps to show super-targeted ads within their apps to users. All this in real-time. Why do I pick Google - Android as an example to showcase my concept? Apple is a 'walled-garden.' Unless it opens up its OS ecosystem in multiple ways to allow 3rd party players and to allow multi-user accounts on one device, the concept will fall apart. Google's open ecosystem and open source mobile OS, permits players to 'plug-n-play' into the system. Of course security is a big concern. If a malicious hacker hacks into your account, your device activity can be downloaded and used to bombard you with malicious ads. The repercussions can be way more severe. The hacker will have access to your purchase history, TV viewing habits, emails, credit card information...I shudder to think what else. Mat Honan's (with all due respect to you, Mat) ordeal will look like a bulling event in the sand box. Until digital security evolves with developments in Mobile, building a critical mass on this ecosystem will be stifled. I see the consumerization of digital security solutions lending a helping hand to us mere mortal relying on a digital security measure dating back to the 1960s at MIT. But more on this in my next post.
I have updated this post to reflect some new developments in the Mobile OS industry. If you've already read this post, skip to the bottom to read the update (21-Feb-2013). I call it the 3rd 'Mobile' OS because I don't believe I or anyone that I know of, has invented a new name for this kind of an OS. An OS that extends itself through all your 'smart' devices - from the mobile device (typically a smartphone) all the way up to your connected/smart/media living-room device (typically a television) and everything in between (typically a handheld tablet. BTW..., oops sorry, by the way, the living-room is increasingly of "intense interest" to many OS developers in the recent past year.
What do I mean by "An OS that extends itself through all your smart devices...?" Lets say you're on your commute back home from work on the subway. You have several applications open on your smartphone; WhatsApp, an ebook reader, a game, music and YouTube. Obviously you are an excellent multi-tasker! Once you get home, you want to ditch that 3/4/5/?/? inch phone / phablet and move everything to your tablet so you can finish watching that short YouTube video, continue messaging your friend on WhatsApp (which was disrupted due to the lack of connectivity on the subway) and resume that game which you paused earlier; all on a larger screen to enhance the experience. Lets move on over the course of the evening. Its time for prime-time! You watch your favorite show on the TV, which has a great interface and menu, all within the same OS ecosystem. Download movies, shows and music to enjoy on your TV, all the while controlling the TV from your smartphone. You want to play a game? Why not open it on your smartphone or tablet and control it from that device but view the game on the TV? Use Skype and view your caller's video on the TV. Set the OS to 'TV mode' so you're not disturbed by unnecessary notifications on your TV. Remember, with all the multitasking going on, your apps are running behind the scene across all device categories. Some content and apps are going to be device-specific, for example full-length feature films that you download on to the TV won't automatically appear on your tablet, unless you want it to through an option when downloading the video. OS's and apps can easily identify the device type that's sending the IP request.
Some of what I have described above is possible with various service offering from OS developers such as iCloud from Apple and limited synching across smartphones and tablets within the Android / Google ecosystem via Google Play, Google Drive and Chrome. But I haven't seen true OS scalability that converges multiple device categories for the same user from an OS developer (I'll come back to why I added "...for the same user.").
Wait hold on! Ubuntu you say? Yes, the open source linux based Operating system, Ubuntu, has been working on the forefront of Mobile OS. Their product offers OS scalability and convergence across devices categories. Unlike Apple and Android, Ubuntu includes the TV as one of the device categories and with that, Ubuntu covers them all....well...except for wearable computers. No, AirPlay and Google TV don't fit the bill.
Going a step further, imagine having multiple user accounts per device, baring the smartphone, which everyone likes to have their own. I certainly don't want to invest in smart TVs for every member of my family. And 2 or 3 tablets between a family of 4 might even suffice. So if I am done using the tablet, I can logout with a touch of a button and my wife can log onto it with her thumb print - no need to type your user ID and password. While she's surfing the net, I can grab my smartphone, fire up the TV app and switch it on, again logging in with my bio-metric authentication. Voila! all my streaming videos brought to me via Hulu, Netflix, Aereo, HBO Go, etc, etc are exactly where I left off from the previous night. If my phone rings, I can have the TV automatically pause and resume after I am done with the call. Don't like it that way? That's OK, change it in settings.
Anyways, I am getting carried away with the perks of such a system. My point is to have all my entire digital world under one umbrella, device-agnostic.
How is everything kept (uh oh don't use the s-word!) synchronized? (Noooooooo!) Well for a lack of a better word, we'll have to go with sss...ynchronized. Actually lets call it everything everywhere or EE. Our talented OS hackers will need to create lines of code to juggle real-time data and apps between devices. Given the development in device-to-device connections, such as WiFi Direct, EE will be possible.
Advertisers will love the platform. They'll be able to track your online habits across all device categories, watching the differences in the way the user consumes bits and bytes on different devices. Couple this with programmatic Real-Time Bidding, and we're going to see fireworks in the Ad Tech industry!
Top Smartphone Platforms 3 Month Avg. Ending Dec. 2012 vs. 3 Month Avg. Ending Sep. 2012 Total U.S. Smartphone Subscribers Age 13+ Source: comScore MobiLens
Share (%) of Smartphone Subscribers
Sep-12
Dec-12
Point Change
Total Smartphone Subscribers
100.0%
100.0%
N/A
Google
52.5%
53.4%
0.9
Apple
34.3%
36.3%
2.0
Blackberry
8.4%
6.4%
-2.0
Microsoft
3.6%
2.9%
-0.7
Symbian
0.6%
0.6%
0.0
Credit: comScore
Enter Google. The 'Do No Evil' company doesn't make money on licensing its Android OS to smartphone manufacturers because it makes its money on ads. Regarding the multi-user per device, some Android Tablets already offer that feature, so Google is on-board. In fact Google doesn't care about any of this, it cares about making boat-loads of money on ads. They can even afford to buy a hardware company and use it to increase revenues from ads...desktop, search, mobile...the whole gamut. Wait a sec...they already bought a hardware company! Motorola, one of the oldest and biggest mobile communication hardware manufacturer in the world. Trust Google to make a huge bet on a completely different business model and then turn it around to fit in with its own cash printing mantra. Google is finally showing the world what it intends to do with Motorola. The latest rumored X Phone will certainly feature the very best of Mobile OS. I see the pillars of the 'Everything Everywhere' concept slowly being erected within the Google ecosystem. Next step, make the X Tablet and then the TV or a set-top box. Layer all the devices with Android and there we have it! And you thought the the FTC was done with Google. Wait till the regulators knock on their door when Google monopolizes the digital world with EE. Update (21-Feb-2013): Ubuntu has just announced that it will be releasing its Operating System for Tablets. This is great news for the software company since this new development includes the 3 device types I talk about in this post. The design of the OS is beautiful and tactful with all sorts of input gestures and multitasking. Most importantly, Ubuntu has included a robust multi-user feature that even supports a guest user. This feature, again, goes back to one of the hypothetical OS features I talk about in my original post above. The multi-user feature is an important element of the second screen concept and to the Ad Tech industry. Ubuntu now has an OS ecosystem that integrates the TV, Tablet and Smartphone to some extent if not to the full extent I have described in this post. Note that I don't even mention the desktop as a device type because all you have to do is add a keyboard (virtual or physical) and mouse to your tablet and voila! I haven't reviewed the product so I am not sure how much the Ubuntu OS converges across the 3 device types. The Ubuntu ecosystem has some catching-up to do with the 2 dominant players in terms of app offerings, but I think its an alternate OS to keep an eye on. Watch the awesome video below hosted by Mark Shuttleworth, founder of Canonical, which is the commercial entity behind Ubuntu. The Tablet hardware in the video looks like a Google Nexus 10, made by Samsung. The video shows how the Tablet OS seamlessly integrates with the Smartphone OS - you can use the phone apps on the tablet. However, its not clear what technology is used to port the phone screen over to the tablet screen (this is the part where the phone is shown mysteriously disappearing behind the tablet at 5min and 10 secs). Similarly, Mark talks about converging the TV into the ecosystem. I see this company moving towards total OS convergence.
Its now a given that technology is a disruptor in many facets. Nowhere is this more true than with 'Mobile.' The word Mobile fused with technology, conceptually speaking, is a force to recon with. It has disrupted and is in the process of disrupting many industry players, some of them being incumbents. The modern-day tablet computer is wiping out the PC industry. Dell and HP, being prime examples of the remnants of the declining Wintel era, thanks to an onslaught of disruptive innovation brought on by mobile technology.
Lets take mobile technology and tack on another popular trend in the online advertising world. Real-Time Bidding, or RTB for short, provides an automated platform to match supply-side inventory with demand-side advertisers. I sense the disruption in this relatively new concept is the 'real-time.' Real-time means advertisers will be able to buy ad inventory and flash it on a mobile screen at the right time and at the right location. Let me run you through a scenario. Lets say you're walking in Times Square. A supply-side entity, lets say facebook, knows you are at Times Square because you have location services switched on. Facebook uses a RTB platform and connects with a demand-side advertiser. The advertiser with a store-front in Times Square notices that a 'consumer' (you) are at Times Square and flashes an ad on your mobile screen. For RTB to work, you would have to be looking at your screen while using an app that supports the RTB platform. I've simplified the whole process of the Display Ad ecosystem. Behind the scene it is complicated and messy. Dare to dive into it? Take a look at the LUMAscape of the Display Ad ecosystem. So thats what RTB can do. Advertisers get real-time information about you through your smartphone and immediately send you ads via apps that support the platform. The key to Mobile RTB is location.
Anyways, you might be wondering why any of this has to do with Walmart? To answer that, I am going to ask you a question. Which advertisers are going to use RTB on Mobile? Is it Walmart or the single-brand and Mom n Pop stores that you walk past on a street? Walmarts are glorified warehouses typically located outside of cities. You typically need a car to get to a Walmart.
Do you see any stores other than a Walmart? Do you see any mode of transportation other than a car?
The experience of shopping at a Walmart is less dynamic than walking down Rodeo Drive or 5th Avenue. On city shopping streets, you will pass by hundreds of single-brand or Mom n Pop stores. These stores will want to use RTB ads to lure you into their store which is walking distance from you because they know you are there at that very moment (i.e. real-time). Yeah sure, Walmart could use RTB as well but mainly to show you promotional items once you're already in a Walmart store. The RTB ad won't do any good to Walmart if you're walking down a busy street. They can simply show you a regular display ad on your screen - why bother with RTB platform. You see, the contextual relevance is key to delivering ads via RTB.
IMHO, ads delivered on the RTB platform will be more effective than regular 'dumb' ads because of their precise targeted and contextual nature. Users of RTB will see their business increase as they lure you away from Walmart.
