|Issue:||Europe I 2007|
|Topic:||Mobile chasms and tornadoes|
|Title:||Chairman & CEO|
Stanislas Chesnais is the Chairman & CEO of Netsize Group. Mr Chesnais is a serial entrepreneur who has created leading high-tech companies, including Aldea, Cleade and Netsize. Netsize has won the Deloitte Technology 50 award for three consecutive years for being the fastest-growing technology company in France and EMEA. Stanislas Chesnais has years of management consulting and high-tech experience and began his professional career as a consultant for Ernst & Young in France and Canada. Mr Chesnais holds a Master’s degree in Business Administration from ESCP (Ecole Supérieure de Commerce de Paris) and an MBA in marketing from Drexel University, Philadelphia.
The mobile phone sector is growing as never before. Handsets offer more features and cost less. Services such as triple-play voice, video and data will soon be readily available on mobile. New technologies – e.g. WiFi, WiMAX and Bluetooth – will soon make seamless connections between networks and reduce calling costs. Public demand for applications, specialised content, business communications, mCommerce, mobile banking, entertainment and such is driving the growth of the entire mobile sector – and no end is in sight.
The journey of the mobile phone from a Brick to a pocket-sized global communication tool has come along faster than it was predicted. With over two billion phone users worldwide and many more joining every second, mobility has become an intrinsic part of our personal and work life. Well it has not been an easy journey, and barriers to entry into this market have been systematically routed out over many years. The revolution began with subsidised handsets, global roaming agreements, introduction of prepay, SMS, ringtones, premium billing and beyond. The list of positive developments is never ending and diverse technology standards sometimes have come as a boon rather than a curse. On one hand, there are common cellular standards, such as GSM and CDMA, supporting technologies such as voice, SMS, GPRS, 3G, etc. that are leading the personal communication services revolution. On the other hand, technologies such as WiFi, WiMAX, RFID, Bluetooth and VoIP are also contributing competitively to make wireless business communication seamless and fast; they are pushing the boundaries, the limitations, of legacy mobile standards. The wireless market, apart from serving the basic need of peer-to-peer communication, is clearly developing into four main vertical sectors, summarised in our view as mobile entertainment, mobile business, mCommerce and mobile marketing. Mobile entertainment – led by downloadable music, games, videos, interactive TV, adult services and ‘infotainment’ – is the fastest-growing service, attracting global brands to make the most of this opportunity. Consumers are driving the market by consuming entertainment services as time killers while they are on the move travelling, but also when at home sitting in front of the TV. Mobile business services are driven by the need to improve productivity and reduce costs. Ever more people are working remotely and on the move powered by wireless laptops, PDAs and mobile phones. On one hand, companies are benefiting from the increase in human productivity, while on the other, machines, vehicles and IT systems are exchanging information over wireless channels and saving billions in costs. Mobile commerce is another fast developing area, currently driven by low value transactions over the phone. But given the variety of mobile payment billing solutions such as Premium SMS, WAP Billing, M-Wallet and Micro Payments – the market is set for exponential growth. Leading online travel and retail sites have recently launched branded mobile portals enabling consumers to book holidays or buy books and CDs, among other things, on their mobile using a combination of different payment mechanisms. Mobile marketing has grown beyond on-pack promotion with mobile numbers and a call for SMS, short message service, response printed on FMCG, fast moving consumer goods, to mobile portals with consumers experiencing a richer interactive experience with their favourite brands. However, the Short Code number (short telephone numbers for SMS and MMS messages from mobile telephones) has become the mobile equivalent of an Internet URL and all mobile marketing campaigns now include it. On-pack promotions, today, still enjoy a high response rate; one FMCG brand recently set a record by receiving millions of responses in a matter of three months. The introduction of mobile TV is a new opportunity for this sector, and is encouraging marketing agencies to join the bandwagon. On the other hand, digital convergence of the Internet, wireless data applications, voice services and TV has been grabbing the headlines in 2006 and the technical jargon describing it – triple-play, quadruple-play, multi-play – is evolving to keep up. Everyday examples of convergence include our ability to access email and office applications from multiple devices in fixed and mobile environments, and the ability to interact with our television using our mobile phones to vote during Big Brother and Pop Idol. There are other converging entertainment applications which have become commonplace. TV now can also be viewed on our mobile phones and on the Internet; conversely, we can access the Internet and many interactive services via our TV. We can publish our own films by shooting videos with mobile phones and digital cameras. In the comfort of our cars we can access digital maps and get directions over GPS, the Global Positioning System, satellite and wireless channels, while passengers enjoy digital TV, radio, gaming and in-car entertainment. The same car can also be fitted with wireless security messages that trigger emergency assistance in response to an accident, inflation of airbags, theft or the click of the help button. This may sound like a car from a James Bond film, but these are the features you can easily get on most new cars on the market. Convergence affects every aspect of our lives. The food we eat comes from supermarkets where the supply chain is monitored by computers – not only at the offices and warehouses, but also through wireless devices fitted in the trucks transporting the food. These track the truck’s location and monitor the food storage temperature throughout the trip to guarantee its conservation and quality. The warehousing, stocking and sale of retail goods is increasingly being managed by RFID wireless tags and barcodes. Utility service providers, such as for gas, water and electricity, are using wireless metering equipment to reduce the time, costs and manpower needed to monitor such devices physically. Today, most people use electronic money and Internet banking to manage their finances. Written signatures have been replaced by Chip and PIN codes keyed-in by consumers to wired and wireless payment devices. The mobile phone has established itself as the de facto device used for micro payments and the purchase of digital goods opening an entirely new market of consumers who do not own credit or debit cards. Music has broken all boundaries by making itself available in a variety of different digital formats and devices. The CD market still exists, but there is an increasing trend for music being consumed on mobile phones, Internet and MP3 players such as the i-Pod. Media companies are increasingly buying Internet companies, mobile phone operators are launching broadband services, and Internet companies are offering mobile services. When you go to your local retail store or shop online you can buy anything and everything from companies you least expect to be selling such digital services. There is definitely a fundamental shift in consumer habits and attitudes towards digital content consumption. Otherwise, how could one explain search engine brands with greater market values than oil and gas companies on the stock exchange? The trend is pointing towards a convergent future where all electronic devices, machines, automotives and media can communicate across digital channels over fixed and mobile networks. With so many opportunities, the eco-system of mobile application and service companies is ever expanding. In the words of Steve Jobs of Apple Computers, “The Chasm is where many high-tech fortunes have been lost… The Tornado is where many have been made. The industry has crossed the mobile chasm and is into the tornado. According to Geoff Moore, renowned author of many books including Crossing the Chasm and Inside the Tornado, “Once a product reaches the mainstream market, companies face three most important questions including, What is the best way to develop a stronger market for the company’s products?, What is the best way to capitalize and sustain growth?, and finally when the market inevitably subsides, how can businesses survive the change?” The mobile industry comprises many players, including mobile operators, device manufacturers, content publishers, wireless application service providers, and many more, who are at the crossroads and must decide the direction they will take and their place in the value chain, from where they can best serve their customers’ needs – and their own. There has been no better time than the present for consumers and businesses. They have an extraordinary range of choices in terms of communication services and their suppliers. This is also the best time for mobile industry players to find their niche, create globally recognised brands and ensure long-term growth.