The global mobile industry today consists of a complex series of dynamic, interrelated ecosystems. It’s becoming an ecosystem of ecosystems. MEF Global Chairman Andrew Bud discusses this new phase in mobile’s evolution – dubbed Mobile 3.0 – and outlines the opportunities and challenges facing the many new players coming into the industry from outside the traditional mobile space.
Regardless of the focus of your mobile activities, you will have business-critical relationships with other technology providers, marketplaces, developers, brands and consumers. You are part of an ecosystem – a fast and dynamic network for converting innovation into new and exciting services to consumers.
What we are now seeing is a shift to a new era of mobile ecosystems – Mobile 3.0.
The original mobile model – call it Mobile 1.0 – was largely characterised by the dominance of mobile operators and handset vendors. Operators controlled access to anything worth having in mobile, and dominated the relationship with the consumer. They worked in partnership with the handset manufacturers who powered so much of the innovation. Premium billing was a powerful nutrient in this first mobile ecosystem. Today this world survives, but as a business model it is far less potent.
The Mobile 2.0 ecosystem was – and remains – dominated by Silicon Valley big beasts. Behemoths like Google, Apple and Facebook have brought game-changing products and services to market and maintained their dominance at the top of the ecosystem.
Mobile 3.0 is the next phase in mobile content and commerce. In it, the mobile has become the primary tool for engagement and transaction in consumers’ digital lives and in consequence, an integral part of every business model – including those outside the traditional mobile space.
What we are now seeing is businesses and brands from outside the mobile technology space making this change. Progressive corporates and organisations increasingly also realise that there is crucial innovation springing from the world of mobile-savvy start-ups, and that they need it.
Nike, Barclays, TFL, Red Bull and countless others are building their own ecosystems and adapting both their organisational culture and business models to harness the potential of mobile technology, enabling them to drive mission critical parts of their business forward.
These changes do not happen as part of a short-term technology initiative; rather, they take place at the heart of an organisation and often require a rethink of business structure, so that where formerly companies’ immune systems made them resistant to change, a complete inversion of approach is now happening, necessarily driven from the top down.
Evidence of this transition abounds; some of the world’s most visible brands are adapting their business models, embracing change and capturing innovation to stay competitive in an increasingly demanding and mobilised market place.
And it’s not just mobile apps or sites that these companies are building. They are keen to leverage broader innovations in payments, behavioural analysis and the gathering and analysis of big data, creating mash-ups that bring together location, e-commerce, payments or loyalty into an integrated, mainstream user experience.
Open APIs which enable developers to tap into a consumer brand’s huge data resources, partner programmes and partner friendly contracts, new revenue sharing models, marketplaces and testing & certification programmes all combine to usher in disruptive companies and deliver this expanded ecosystem, elevating innovation to a central business process.
A consistent characteristic of Mobile 3.0 is that the benefits are bi-directional. A large company can hope to achieve much lower or negligible mobile service development costs, accelerate speed to market and deliver products that add value to an existing service, while keeping them relevant in the fast-paced mobile space.
For the disruptive company the benefits might include larger, faster market reach, access to much greater marketing resources or huge data sets that strengthen and often underpin the service that they are bringing to market and were otherwise sealed off within a walled garden. This is true symbiotic creation of value.
For example Transport for London is data-rich and arguably innovation poor, yet it has brilliantly created user value by creating an ecosystem that supports mobile companies bringing innovative transport services to market.
Similarly, Spotify’s numerous partnerships with mobile network operators exemplify how relationships in the Mobile 3.0 ecosystem work. One can invert the Mobile 1.0 perspective, and argue that mobile operators are now part of the Spotify ecosystem which integrates music, transactions, entertainment and technology.
As a service it adds value to mobile operators and highlights another aspect of Mobile 3.0 – super-apps displacing one-off purchases to offer months of immersive game-play, ongoing subscription-based content streaming or ongoing relationship sustenance. Only five years ago, during the Mobile 2.0 era, branded apps were perhaps a gadget, a fleeting feature of the zeitgeist. Now brands understand that mobile services are a fundamental part of their core propositions, since the consumer today expects an integral and long-term mobile window on service and engagement.
It is also interesting to see how different companies address innovation and the development of organic ecosystems in different ways. Some are building disruption into their metabolism by creating incubated, skunkworks teams that are able to move quickly, unencumbered by corporate structures and processes from within.
One example of this is how Orange brought its OTT service, Libon to market. In many ways it – like an increasing number of external protagonists – challenges the carrier’s own traditional services of SMS and voice. The specially created intra-preneurial unit was protected from Orange itself and able to launch a disruptive service. The benefits to Orange have been many, not least in the service’s appeal to non-Orange customers (only 20 per cent of Libon users are actually Orange customers) and in helping the network to grow international voice and messaging traffic. These benefits might not have happened had Orange not realised the potential of disruption and made significant efforts to allow that process to happen.
At MEF we are helping to shape the growth of Mobile 3.0. It’s clearly significant that companies from beyond the Mobile 1.0 and 2.0 envelope – like financial services powerhouses Barclays, Rabobank and Mastercard – have been elected to our Chapter boards and sit alongside disrupters such as Mozilla and WeChat as well as operators like Telefonica and Smart. This reflects how the mobile industry is growing in its diversity, keen to harness innovation and disruption. Our community is working together to drive Mobile 3.0, bring newcomers into our fold and connect them with those whose expertise has grown up over many years. Together, we will build long-term, sustainable strategies for the ongoing growth of this new ecosystem of ecosystems.
This article first appeared in World Telemedia Magazine Spring 2014 and is re-published with permission.