The Skweezer Blog

According to two different analyst houses this week, NFC mobile phones and contactless-enabled points of sale (POS) are both expected to take off in the next few years, creating a perfect storm for mobile payments and couponing. Juniper Research is forecasting that one in six mobile subscribers will have a NFC phone by 2014, and IMS Research said today that the number of locations that accept contactless payments will increase to more than 12.5 million by the end of 2013.

Juniper Research predicts that says the redemption value of mobile coupons will be almost $6 billion worldwide by 2014. It also states that over 10% of mobile customers in some regions will be using mobile coupons within five years, with NFC coupons and smart posters generating more revenue per user than standard NFC transactions. Most value is expected from the Far East & China, Western Europe and North America.

These NFC handsets will be primarily used for payments and retail transactions, including coupons, according to Howard Wilcox, senior analyst and lead author of Juniper’s report. He also noted that the rollout of NFC-embedded handsets is the bigger limiting factor than POS equipment, but that it is beginning to change with Nokia’s 6126 Classic NFC phone coming to market before the end of the year and others expected to follow suit. NFC is “poised to enter an operational build-up phase culminating in mass service rollouts across many countries,” according to Wilcox.

This will be especially true for metro areas driven by transport ticketing, and retailing ARPU from NFC mobile coupons and smart posters will also be lucrative, exceeding ARPU from NFC payment transactions. Juniper believes that by 2014, more than one mobile subscriber in 10 in developed regions will use mobile coupons, and that usage will generate close to $6 billion globally in retail redemption value.

According to IMS Research, growth in contactless POS will accelerate six times faster than the overall electronic funds transfer at point-of-sale market. IMS research director John Devlin notes in the report that although the market took a downward dive in late 2008 and the first half of 2009 (primarily in the retail and hospitality sectors), the market now returning to growth. Those companies that managed the economic downturn well are now investing in new contactless technologies rather than replacing their existing, essential POS equipment, Devlin said.

Also helping the demand of contactless POS is that card vendors and banks are beginning to issue more contactless cards and consumer awareness is growing in many countries. Devlin noted that as the retail and hospitality sectors continue their recovery, differentiation will be increasingly important to compete. Accepting new forms of payment, including contactless cards, fobs and NFC and mobile payments will be key.

Posted by Mark Sieve

I recently wrote a post about the increasing pressure Microsoft is experiencing with their Windows Mobile OS from heavy-hitting players like Google and Apple. Looks like Microsoft is taking the threat seriously and has just launched the new Windows Mobile 6.5 operating system. Microsoft expects partners to deliver more than 30 phones worldwide that use the new OS by the end of 2009.

Here are some feature highlights from the Microsoft Press site:

• A new enhanced Windows Live experience with What’s New feeds and improved Windows Live photo sharing across major social networking sites (such as Twitter, Facebook, MySpace and Flickr)
• A best-in-class e-mail experience and the ability to manage multiple accounts right from their phone with Outlook Mobile and Exchange Server synchronization
• The ability to use PowerPoint and open and edit Word and Excel documents from their phone with Microsoft Office Mobile
• The power to sync files on the phone through Windows Live Media Manager and play media files seamlessly with Windows Media Player
• A redesigned Windows Internet Explorer mobile browser with Adobe Flash Lite2 that brings the mobile Web browsing experience closer to what people have come to expect from their PC

Android has also been in the news, as Google and Verizon have announced a partnership that will see Android increase its growing market share. As for Apple, iPhone OS 3.1 was just released in September, but Apple’s commitment to dominating the smartphone market is readily apparent. And Nokia’s Symbian and Research In Motion’s Blackberry seem firmly entrenched in the number one and two spots respectively.

Looks like Microsoft isn’t going to go down quietly though…

To read the Microsoft’s full press release, click here.

Posted by Mark Sieve

Today CNN announced an iPhone app that has already gained widespread praise in the few hours since its release [1] [2]. According to Reuters, some features of the new app include:

• Users can flick through news stories across categories. Additionally, when the device is rotated horizontally, stories can be flipped through quickly.
• Each story features bulleted highlights above the full article, designed to satisfy mobile “snackers,” allowing them to scan through the latest stories, as well as meet the needs of users who want the whole story.
• Local news, weather and traffic based on user’s actual location or the ability to select a specific location.
• Ability to “follow” a story or topic: As CNN publishes breaking news alerts or new stories related to a chosen topic, the app will push the updates to the device.
• “Saved” content, which enables users to access text stories even when they’re offline.

I find it interesting that CNN Interactive Group chose to launch this as a paid app, as free apps are between four and six times more likely to be downloaded than their paid counterparts. The new app is actually ad-supported as well, displaying ads while video loads (though not utilizing the “pre-roll” ads often found in online news clips).

Although many apps generate more revenue for their developers as paid apps than through an ad-supported model (see this informative article on Jonathan Wegener’s blog), apps that are used repeatedly earn more with advertising in the long run. Playing around with the app this morning, I have to say that I think this is something users will be interested in using frequently indeed.

Still, don’t be too surprised if CNN offers their iPhone app for free within the next few months. The people that had to have the product will have paid up, while the 6x users who were unwilling to pay can still generate revenue for CNN through their mobile ads.

Posted by Mark Sieve

Mike Dano published an interesting story on Fierce Wireless today. The main gist of the story revolves around a recent report by research group CCS, which indicates that Microsoft’s Windows Mobile operating system is losing ground to Google’s Android. Some reasons to support this claim, according to Dano’s article, include:

• Motorola is betting the farm on Android, a decision notable in light of the company’s heavy reliance on Windows Mobile for its previous smartphone efforts (think the Moto Q). The message from Motorola’s leadership is clear: Windows Mobile can’t turn us around. (I realize that Motorola is still technically a Windows Mobile user, but based on the company’s massive Android push I think it’s safe to remove the company from the Windows Mobile column for the time being.)
• HTC–Microsoft’s first and largest Windows Mobile licensee–continues to pour energy into Android at the expense of Windows Mobile. “CCS Insight predicts that sales of HTC Android devices could outnumber those of its Windows Mobile products in 2010,” the firm said. “This is undoubtedly a worrying prospect for Microsoft given its current reliance on HTC as its biggest licensee.”
• Sony Ericsson’s latest smartphone, the Xperia X2, sports Windows Mobile, though the company also supports Symbian products and has stated its intent to build Android devices. CCS Insight predicts Sony Ericsson’s new management will abandon Windows Mobile in favor of platforms it has more control over, like Android. A Sony Ericsson spokesman however reiterated the company’s support for Windows Mobile, and declined to speculate about Sony Ericsson’s future platform plans.
• LG, the world’s third largest cell phone maker and a latecomer to the smartphone game, recently promised to produce 50 Windows Mobile phones. However, the company also recently announced its first Android device. “Microsoft may have offered LG preferential licensing terms in order to offset weakening commitment from HTC,” posited CCS Insight.
• As for Samsung, the world’s second largest handset maker, it remains a Windows Mobile licensee, though it too has worked with Android lately and has dabbled in Symbian as well.

Of course there are other major players vying for the mobile OS spotlight along with Microsoft and Google–most notably the open-source Symbian OS from Nokia and Research In Motion’s Blackberry platform. And of course there’s Apple’s ridiculously successful iPhone.

When we started Skweezer back in the day, potential investors and partners always asked us, “How does your business relate to Microsoft?” Now the question is usually, “How does your business relate to Google?” Looks like there may be a changing of the guard as Google steps in to replace a faltering Microsoft as the alpha-male at the head of the mobile operating system pack.

Still, as Dano notes in his article:

…as with anything Microsoft, it’s not over until the company says it’s over.

Posted by Mark Sieve

The Environmental Working Group has just come out with an interesting study about the amount of radiation emitted by cell phones that’s worth a read. There’s a list that ranks devices by radiation intensity that’s also worth looking at. I was dismayed to learn that my iPhone is one of the heavy emitters, though EWG is quick to point out that:

We at Environmental Working Group are still using our cell phones, but we also believe that until scientists know much more about cell phone radiation, it’s smart for consumers to buy phones with the lowest emissions.

Still, I might just get that Bluetooth headset at Costco I’ve had my eye on…

Posted by Mark Sieve

Over the past few days there have been several columns published regarding the public’s perception of mobile advertising. What’s striking to me, as somebody who follows the news closely on this subject, are two things:

1. The frequency with which studies are coming out pertaining to the social impact of mobile advertising
2. The diametrically opposed findings of these studies

Take for example several headlines from the past few days:

9/14 - Users Of Smartphones More Sympathetic [to] Social and Mobile Advertising
9/12 - Mobile (And Particularly iPhone) Users Not Keen On Clicking Ads
9/11 - Mobile Ads See High Traction Among Youth
9/11 - Consumers Want Nothing to Do with Mobile Ads?

One of the difficulties with measuring public acceptance of mobile ads is the diverse nature of the mobile advertising platform. For instance, advertising on mobile devices can take the form of CPM banners, text-based CPC ads, and opt-in SMS/MMS alerts or coupons. And these ads can be delivered to the user via downloaded apps, mobile browser, or SMS/MMS. Not to mention behavioral differences by age group, economic status, and geography.

One thing seems probable however: we can eventually expect free, ad-supported content to be the norm in the mobile environment just as it currently is in the more mature desktop environment. Given the choice between free apps, ringtones, Web services, etc. with advertising and paid content without advertising, consumers will in all likelihood choose the former.

Posted by Mark Sieve

Recently, a Danish consultancy—Strand Consult Publications—put out a surprising "reality check" on the hype surrounding the iPhone.

I, for one, was surprised to see a list of ten myths purported to be false by this consultancy:

1. The iPhone drives data traffic into mobile operators networks
2. The iPhone helps operators attract new customers
3. The iPhone is good business for mobile operators
4. The iPhone is dominating the mobile services market
5. App store is a huge success that has revolutionised the services market
6. There is money to be made by developing applications for the iPhone
7. It is iPhone customers that are generating the majority of online mobile surfing traffic
8. The iPhone has a large market share
9. The iPhone was the first mobile phone with a touchscreen
10. The iPhone is a technologically advanced mobile phone

Unscientifically, I see more and more of my colleagues, friends, and family acquiring iPhones, Blackberries, Vue’s, Pre’s, et al smartphones. So, it’s surprising to see that iPhone—the perceived champion of all mobile devices—is causing a negligible effect… and in some cases a loss… with operators worldwide. For example, AT&T said they would’ve had a 40% margin had they not launched iPhone 3GS. Apparently, further network backhaul was needed to support the vast amounts of data consumption these smartphones create:

Nonetheless, I’m heartened by the increased amounts of smartphone usage and the "investment" the carriers are willing to do now to begin realizing the profits from such devices long-term.

The question is, how long?

By Kevin Perkins

An interesting perspective from Mike Dano over at FierceWireless… I think it continues to make the case that a need for a quick-access, streamlined view of web content will always be needed in a highly fractured device—and standards—marketplace.

A begrudging farewell to WAP

As the world rushes toward a smartphone future, I find myself a little wary of the rich multimedia of the Promised Land. After all, WAP is actually pretty great, when you think about it.

But let me start from the beginning. WAP stands for Wireless Application Protocol, and it was invented in the early 18th Century (yes that’s supposed to be a joke) as a way to give Neanderthal cell phones with grayscale screens a taste of the Internet. See, phones from the Stone Age couldn’t download huge images or complicated HTML layouts like the newfangled ones you kids use today, but they did have just enough processing power and bandwidth to access small amounts of information stored on the ‘Net. The solution? WAP, which is essentially a scaled down version of the Internet that supports tiny screens and mostly text-based content.

WAP was touted as the second coming because, after all, it was the Internet on your phone! Incredible! Amazing! What a useful, sure-to-be-profitable technology. Of course, when people actually tried WAP they discovered it was the Internet circa 1981 on your phone, which isn’t really the same thing. Nonetheless, millions of phones shipped with WAP browsers, and at least a dozen websites launched WAP versions of their desktop offerings.

Then along came the iPhone and other high-powered smartphones, and–poof–regular websites are now available to cell phone users. You no longer have to pay the WAP tax to visit the Internet! How wonderful! Further, according to various analyst projections, all phones will be “smart” in a few years, so there won’t be a need for WAP versions of regular Internet sites–and everyone will be happy. Right?

Well, maybe. I’ve been a traveler on the wireless Web since the days of mMode on the original AT&T Wireless (remember that?). I’ve perused WAP sites from The Onion to The New York Times, and plenty of stuff in between. And I have to say: WAP is not crap.

In fact, I would argue with only a little bit of sarcasm that WAP is in some cases better than the “real” Internet. Why? Because you don’t get all that extra nonsense–no enormous banner ads that move when you mouse over them, no huge lists of links to random sites that may or may not be scams, no popups and no trickery. There’s just no room for it. Instead, what you get with WAP is just straight up information. You get the text of a story or post, possibly one small picture, and maybe a banner ad. And that’s it. And since no one actually pays attention to WAP, you can sometimes get free stuff: Did you know that the Wall Street Journal’s WAP site (http://mobile2.wsj.com) is not locked down?

Further, I would argue that the WAP tax actually keeps the riffraff from clogging up the scene. When I search the wireless Web, I don’t have to wade through millions of results–mainly because there aren’t millions of results. Most WAP searches turn up relevant and legitimate results because only the entities with useful content are venturing onto the wireless Web in the first place. It’s like natural selection, without the killing and eating part.

Indeed, I’ve grown accustomed to browsing the WAP sites of publications like The Washington Post or The New York Times. In some cases I prefer them to the desktop equivalent; they’re straightforward, no nonsense, and very easy to navigate.

Obviously there’s a clear benefit to being able to access the full Internet while mobile, but I’m going to miss the simplicity of WAP. Perhaps the Web designers of tomorrow will take some cues from the wireless Web–do more with less. Make it simple and clean. No tricks. The website of The Raconteurs is a good example. Press space bar to continue, indeed! –Mike

Posted and commentary by Kevin Perkins

Skweezer Ads is launching a new mobile banner feed through partnership with Smaato Inc.

IRVINE, Calif., May 19, 2008—Skweezer, Inc. today announced it will begin distributing a new mobile banner advertising feed through partnership with Smaato, Inc.

“Smaato’s open architecture platform allows us to dramatically expand our mobile advertising capabilities,” said Skweezer, Inc. CEO Kevin Perkins. “By combining the breadth of multiple banner ad networks via Smaato, our premium publishers will have more opportunity to monetize their offerings world-wide with their Skweezer Ads feed.”

Skweezer Ads is an online advertising service that provides text-based cost-per-click (CPC) ads to both mobile and desktop environments through a single ad feed. The new partnership with Smaato will allow Skweezer to start offering banner-based cost-per-impression (CPM) ads created specifically for display on mobile platforms. This mobile banner feed is available for international distribution, which supports Skweezer’s presence in over 175 countries.

Initial traffic for the new mobile banner feed will be confined to 200 million requests per month and will be served to Skweezer Ads’ India market. Once the new feed has been thoroughly appraised and validated, it will be distributed throughout Skweezer Ads’ global network of publishers, carriers and ad providers.

About Smaato Inc.:
Smaato Inc. is a leading mobile advertising technology company that provides the open mobile advertising platform called SOMA™ (Smaato Open Mobile Advertising) for developers, publishers, ad sales networks and operators. The SOMA platform enables the delivery of targeted display advertising to mobile phones within applications and on mobile sites. SOMA’s unique feature is the SOMA client, which is a mobile ad server on the handset that optimizes the process of ad-enabling applications for mobile software developers. SOMA can be easily integrated with 3rd party ad sales networks, ad inventory owners (developers, publishers, operators) and ad technology providers.

On the Net: Smaato site: www.smaato.com

About Skweezer, Inc.:
Skweezer, Inc. has been a key innovator of mobile content optimization technologies since 2001, creating award-winning solutions that have accelerated mobile Web adoption and consistently raised the bar in terms of users’ expectations and feature development. Skweezer Ads, launched in 2004, provides publishers and ad networks with desktop and mobile ads through a single ad feed and includes Skweezer’s optimization technology that automatically mobilizes site content for mobile visitors. Skweezer’s scalable, time-tested “carrier grade” content optimization and converged advertising products are relied upon by some of the largest wireless operators, search engines, ad networks, and enterprises in the world.

On the Net: Skweezer site: www.skweezer.com
Skweezer company site: company.skweezer.com
Skweezer RSS Feed: rss.skweezer.com

Posted by Monica Sato

Today I was reading Doug Mohney’s editorial about online video needing to be “good enough”. He commented very nicely on a new product called The Flip that makes it extremely easy to take short video clips, and quickly post them to YouTube, or wherever. Even though the product doesn’t capture at the best resolution… and isn’t going to produce video that you could marvel at on a HD large-screen… it certainly satisfies. Interesting notion. It made me think up The “Good Enough Principle” (GEP), and how it applies to what Greenlight Wireless does.

Here is the typical product cycle for consumer electronics:

• In early markets, where the knowledgeable know what they want, they are the “prosumers”—professional consumers—who are picky, and buy professional products at professional prices
• Usually, these professional products are unfriendly to the mainstreet user. And, prosumers are usually the gear-heads who can make sense of professional products, or who are willing to put the time into learning
• After professional product prices drop far enough, mainstreet users no longer have a barrier to entry to spend the time learning something complicated without feeling like they wasted their money. Example: a mainstreet user can’t figure out how to reset the blinking “12:00″ on the $49 VCR they just bought. But they’re over it because they acquired the thing that allows them to play videos regardless if it’s not working at its optimum

The Good Enough Principle (GEP)

In terms of guidance, I’ve usually deferred to Geoffrey Moore’s Chasm model in describing market acceptance for consumer electronics and software. However, the GEP is likely more about the Power Law in terms of  “head and tail”—a concept made popular recently to describe the effectiveness of Google’s AdSense product—rather than a Bell Curve the way Moore has it. I think GEP starts with a “head” where a number of companies are competing for the wealthiest 10%-20% of
a market. (Many people colloquially refer to this principle as the “80/20 rule” where a majority of the resources come from a vital few.)

However, the challenge with 80/20 in terms of the “technology” business is that price alone doesn’t allow for a predictable product acceptance with mainstreet. It has to be easy AND “good enough” in order for the masses to accept it. Therefore, few companies generally actually attack the other 80% of the market because it costs too much in education and awareness of all the product features. (Again, think of the blinking “12:00″.) That’s where KISS comes in. Those that can combine “easy” and “good enough” obtain GEP… and more importantly… access to the broad—and lucrative—market that nobody wants. (Why was there even a clock on the VCR in the first place?)

This is where it makes sense for The Flip. As Mohney writes:

“It’s not the best solution, but it is good enough. And that’s the way a lot of people need to start thinking about online video. Ultimately, you’d like to have HD and a lot of other features, but right now it is good enough to start using and making money.”

So examine the reasoning why GEP proves out for The Flip. Take a look at the model:

As a user, my daughter’s friend brought a Flip to a sleep-over, and I was struck at how simple—and cool—that thing was. Maybe a step or two above Fisher-Price… but this thing was easily 9-year old-friendly. And thus The Flip’s simplicity inherently expands the market further: the youth are the ones doing the most online video! Next step for Pure Digital? Introduce more sophisticated products as this segment grows up meanwhile eating up marketshare.

GEP in Mobile Web

This sort of thing strikes me as very typical in the mobile phone space as well, particularly with data apps other than SMS. Now that the price points of “all-you-can-eat” mobile internet are coming down, people can “bother” to explore more functionality on their phones—namely, Mobile Web. Every time I speak to someone about what we do, they’re like “wow, your technology can do that?! Cool!”

The challenge is, are there other companies that have more features and coolness than what Greenlight does? It’s all relative, I guess—but sure. But let me suggest to you that those kinds of companies are addressing an even smaller market share of those willing to pay professional prices for a professional Mobile Web experience. One of Skweezer’s key strengths is helping people find Web information and providing transactional access to it in a very simple way. The other strength is providing mobile ads that don’t require publishers to do anything but copy/paste code that mobilizes AND monetizes their pages!

So while the debates rage on about whether Mobile Web is dead, or if the iPhone makes Mobile Web unnecessary, or whatever… while everyone’s trying to make the Mobile Web perfect, we’ll be taking a cue from The Flip.

By Kevin Perkins