Follow the mobile money
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Follow the mobile money
CS5011/CS4032:
Mobile Computing
Bruce Scharlau, University of Aberdeen, 2013
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There are two sides to this coin
Money generated by the mobile ecosystem
Money used by people in their daily lives tied to the use of their mobile
Bruce Scharlau, University of Aberdeen, 2013
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Mobile applications reduce friction
Bruce Scharlau, University of Aberdeen, 2013
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Smartphones overtake PCs
Bruce Scharlau, University of Aberdeen, 2013
http://www.canalys.com/newsroom/half-billion-pcs-ship-2013-tablet-sales-rocket
http://mobilephonedevelopment.com/archives/1657
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Mobile almosts matches population
Bruce Scharlau, University of Aberdeen, 2013
http://communities-dominate.blogs.com/brands/2012/08/the-mobile-moment-is-only-months-away-preparing-for-the-biggest-number-ever-yes-that-day-is-near-whe.html
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Mobile applications are becoming more popular
Bruce Scharlau, University of Aberdeen, 2013
http://www.upsidelearning.com/blog/index.php/2012/05/23/6-drivers-of-mlearning-in-the-workplace/
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Bruce Scharlau, University of Aberdeen, 2013
There are a lot of mobiles5.5 billion handsets (including1.2bn smartphones) with global population of 6.8 billion
Above 100% mobile rate in developed world59% in emerging world
Emerging world still on WAP for data – this is were 5.6 billion people live
Near New Year’s 2013 will be one phone per person
http://communities-dominate.blogs.com/brands/2012/10/a-look-at-the-handset-industry-market-and-installed-base-in-2012.html
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All are SMS capable
Bruce Scharlau, University of Aberdeen, 2013
http://communities-dominate.blogs.com/brands/2012/10/a-look-at-the-handset-industry-market-and-installed-base-in-2012.html
PREVALENCE OF SELECTED FEATURES OF THE INSTALLED BASE SMS capable handsets . . . . . 100%MMS capable handsets . . . . . . 85%Cameraphones . . . . . . . . . . . . 81%Bluetooth . . . . . . . . . . . . . . . . 79%FM Radio . . . . . . . . . . . . . . . . 63%3G or faster cellular . . . . . . . . . 41%WiFi . . . . . . . . . . . . . . . . . . . 25%Touch screen interface . . . . . . 23%Smartphone . . . . . . . . . . . . . . 22%Dual SIM . . . . . . . . . . . . . . . . . 9%Source: TomiAhonen Phone Book 2012This data may be freely shared
That means 4.4bn camera phones
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Price for mobile touch all ranges
Bruce Scharlau, University of Aberdeen, 2013
http://communities-dominate.blogs.com/brands/2012/10/a-look-at-the-handset-industry-market-and-installed-base-in-2012.html
‘smartphones’ are fighting over the 11% band
HANDSET PRICE PYRAMID 2012Premium Smartphones . . . over $450 . . . . 11%Mid-price Smartphones . . . $150-$449 . . . 13%Low-cost Smartphones . . . $80-$149 . . . . 17%Featurephones . . . . . . . . . $40-$79 . . . . . 21%Ultra Low-cost Phones . . . under $39 . . . 38%Source: TomiAhonen Phone Book 2012This data may be freely shared
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Zero to $1trillion in 28 years
• Mobile industry only 28 years old
• Fixed line moving to mobile
• Internet moving to mobile
• Media content moving to mobile
Bruce Scharlau, University of Aberdeen, 2013
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Let’s breakdown the 1.1trillion
• 900bn service revenues– 625bn call revenue– 175bn mobile messaging– 100bn mobile data
• 200bn for hardware– 160bn handsets– 40bn network infrastructure
Bruce Scharlau, University of Aberdeen, 2013
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SMS makes lots of money
• Mobile messaging is broken down with – 120bn SMS– 35bn MMS
Bruce Scharlau, University of Aberdeen, 2013
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Mobile data is bigger than internet
• 275bn data revenues means it’s bigger than internet related advertising, content and access fees (ie broadband and dial up)
• 98bn from premium data (4x what’s paid for on internet)
• 5bn from ringtones (2.5x what iTunes makes)
Bruce Scharlau, University of Aberdeen, 2013
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Average RPU is $13/month
• Average phone user pays $13/month– $50/month in US– > $5/month in emerging countries – $1/month in Nigeria and Bangladesh (and
companies still make money…)
Bruce Scharlau, University of Aberdeen, 2013
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Over 1 billion new handsets/year
• 1.3bn new handsets a year
• About 16% are smartphones
Bruce Scharlau, University of Aberdeen, 2013
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Mobile banking developed most in developing markets
• Right were banking didn’t have vested interests in established practices (leapfrog)
• WAP experiments in 90s not go anywhere
• Czech Republic and S Africa – SMS alert when money being withdrawn from ATM – then nationally in Philippines
• Phone wallets in Japan in early 2000s
• Still developed catching up with developing
Bruce Scharlau, University of Aberdeen, 2013
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Virtual money greater in developing world too
• Habbo hotel of Finland the oldest which predated Second Life and has 175mn users all under 15 and generates $75mn from premium SMS for in-game purchases
• Forerunner of Farmville, etc
Bruce Scharlau, University of Aberdeen, 2013
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M-Pesa provides virtual <->real interface
• Started in 2006 as banking for unbanked – now 58% use mobile banking
• Deposit real money to account and w/draw or transfer to other m-pesa users via SMS
• No more moving real money around where even $2/day wage was target for theft
• Now represents around 25% of GPD
Bruce Scharlau, University of Aberdeen, 2013
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Every phone becomes payment terminal with mobile money
• Swap money via SMS at market, shop, etc
• The change has to come from operators – every phone can authorise payments and evey phone can receive payments
Bruce Scharlau, University of Aberdeen, 2013
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Virtual to real change• Buy credits in shop means shops (G-cash, M-
Pesa, Smart Money, etc) can sell you airtime, etc which means they have too much cash
• Let people withdraw money against airtime means cash goes out – solves problem (banking without banks)
• South Korea – most advanced – has credit cards on sim card so can move/pay with phone and not need physical card
Bruce Scharlau, University of Aberdeen, 2013
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Mobile reduces crime
• Already mentioned Africa and m-pesa means less crime as people don’t have cash
• Works with machines too: parking meters all mobile in some countries – reduces crime against meters
• Sweden now has mobile bus fares – and end of cash (reduce waste of metal, paper, etc)
Bruce Scharlau, University of Aberdeen, 2013
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Mobile applications reduce friction
They make life easierThey make life easier
Bruce Scharlau, University of Aberdeen, 2013