www.republica.fi © 2001 republica corp. business models for mobile services sami kettunen...

www.republica.fiwww.x-fetch.com

© 2001 Republica Corp.

Business models for mobile services

Business models for mobile services

Sami Kettunen (presented and modified by Jups)



Republica Corporation in ShortRepublica Corporation in Short

• Republica Corp. www.republica.fi • FOUNDED: 1996• NUMBER OF EMPLOYEES: 70 (5/2001)• OFFICES: Helsinki, Jyväskylä• BUSINESS: e- and m-business infrastructure software.

Four software products ready to ship, first implementations 6/2000



Republica Corporation in ShortRepublica Corporation in Short

• MAIN PRODUCT: X-Fetch Suite;XML&Java component and agent based e- and m-business infrastructure suite including• X-Fetch Agent Server• X-Fetch Wrapper• X-Fetch Unifier• X-Fetch Performer

• IPR:Patents pending on the key areas of XML-based content aggregating and XML->application parsing



What are mobile services?

• Services that you can use with mobile device– Mobile – European sight (mobile phones, PDA´s)– Wireless – US sight (PDA´s)

• M-commerce– Mobile commerce is all kind of commerce where

communication, transactions or consuming is done with mobile/wireless device



Mobile Evolution

Year 1990 Year 2001



Markets are growing?Mobile penetration

•Germany

•Spain•UK •USA

•Sweden

•Finland

•France

•Denmark

•Italy •Norway•Austria

•Switzerland•Netherlands•Japan

0 10050

100

50

Internet usage penetration



Communication

Wireless business

applications

Value-added services

Mobile entertainment (infotainment)

Commercial Functions

(Transactions)

Directory Services News and info services

Community applications

Icons, ring tones, games

Profiled content Mobile intranet 3rd party commercial apps

Dozens of other applications



Mobile commerce

• Three main categories– B-to-C – Internet-services– B-to-B – Extranet-services– B-to-E – Intranet-services



B-to-C 1/3

• Communication – SMS, chat

• Information services (SMS, push and pull)– One message/order (weather info)– One month (business news)– Limited time (Neste Rally Finland)

• Targeted mass communication and advertising– Group SMS for consumers (with permission, opt-in)– Case Add2phone and snowboarding

• Alarm– Stock prices (high-low)



B-to-C 2/3

• Reminders– Time based reminders – once a month/year

• Community services– Mobile buddies, group SMS

• Personalization– Logos, icons, picture messages, screen savers

• Entertainment– Horoscope, biorythm, jokes, games, chat



B-to-C 3/3

• Financial services (WAP)– Stock broking– Bank services (pay your bills)

• Internet/mobile based games– Finland vs. Sweden ‘war’– Habbo Hotel chat community

• Location services– Where is the nearest gas station, and/or what is the

price



B-to-B 1/2

• Open your databases for your customers– Mobile extranet– Based on real extranet – same authentication– WAP or SMS based

• Alarm services– Supply chain management (low amount of raw

material)– Error information (network down)– Risk management (time to call maintenance)



B-to-B 2/2

• Reporting – Usage reports (today you used 1 000 tons of oil)– Follow up info (electricity stock info)

• Configuration– Use website to adjust your tractor– Adjustments will be sent to the tractor via OTA-file

(Over the Air) – Case Valtra



B-to-E 1/2

• Databases/Intranet services– Address book, CRM, ERP, management reporting,

alarm systems

• Email, calendar, resource calendar• Reporting systems

– Work allocation and follow up, logistics follow up



B-to-E 2/2

• Information– Push-info for target groups– Desktop SMS– News feed from own markets

• Location services– Logistics follow up– Emergency situations – where is the next service

person?– Radiolinja and health organisations tested this in

Helsinki region – how to find nearest ambulance?



Social services

• Home care - trials, some succesful– The home helpers make orders with communicators

from the residense of the elderly

• Health care - still to come– Call centers– Health data from everywhere any time

• keyed in• sensored



Authorities

• Some opinions in favour of closed official networks– extra features

• recording, tracking, locating, securing• EMP-resistance

• Fines for speeding– SMS used by the Finnish traffic police

• retrieve speeder’s gross income from tax databases• The Finns got 30% richer in one night!!!



How to make money with mobile solutions?

• Operators are winners– Developers and content providers accuse operators having

too high comissions– Consumers are not willing to pay 5 FIM/message

• Are consumers ready to pay?– Time management– Time wasting

• People with company phone use value added services• Corporate users – office tools

– Email, calendar and information services• Mass market entertainment services

– TV Chat, icons, ringtones, chat, dating services, community services, group messages, games…



ProblemsProblemsProblems

ProblemsProblemsValue Chain of Mobile Markets

TechnologyPlatformVendors

Infrastructure& Equipment

Vendors

ApplicationPlatformVendors

ApplicationDevelopers

ContentProviders

ContentAggregators

MobilePortal

Providers

MobileNetwork

Operators

HandsetVendors

MobileService

Operators

Customer

Operating systemsand microbrowsers(Openwave, Nokia,Ericsson, Microsoft)

WAP, HSCSD,GPRS, EDGE,UMTS (Nokia,

Ericsson, Siemens,Motorola, Lucent)

Middleware and standards

(Nokia, Phone.com,Ericsson, ETSI,WAP Forum, UMTS Forum)

Mobile platformapplications

(Yomi Vision,Akumiitti,

Dr. Materna,Add2Phone)

Content(Reuters, CNN,

Yahoo,Kauppalehti,SM-Liiga...)

Contentaggregation

(Digitallook.com,Sanoma-WSOY)

Applicationaggregation(Radiolinja,Sonera Zed,

Telia MyDOF,T-D1@T-Online,

BT Cellnet Genie)

Operators(Vodaphone,Sonera, Telia,

Orange, Mannesman,Telenor....)

Value AddedServices

(Saunalahti,Buumi.net,

Keltainen Pörssi,Alma Media/MTV3.fi)

Handsets(Nokia,

Ericsson, Motorola,Philips, Microsoft...)

Handset andSIM Retailers

Retailers(Mäkitorppa,

Setele, Tietopuhelin,

Luurikauppa...)

Based on Mobile Commerce Report, Durlacher

Various

forms

of support



Operators Value Chain

Hostingapplications and/

or third-party portal

Terminal vendor

Customer

Subscription/access fee,Servicecharge

Pays for hosting/portal service

Bulk handsetpurchase

Retailerse-commercemerchants

Big portal player,eg. AOL,

Yahoo! etc

Site fee

Banks/financialservice

providers

Content provider

Site fee

Mobile operator

Handsetsubsidies

Site fee

Cut of transaction

Advertiser

Pays site fee

And/orrevenuesharing

And/orRevenuesharing

Lähde: Ovum



Pricing of mobile services

• Monthly fee – flat rate– News service – 50 FIM/month

• WAP-SOLO – 4 mk/month + data connection

• Transaction fee – pay only when you use– Ringtone – 5-10 FIM/download– Chat – 5 FIM/message– Vote in TV program – 3,50 FIM/vote

• Time based fee– Start fee (0,60 FIM) + 1 FIM/minute

• Free service – paid by advertisers



Mobile software – pricing models

• How mobile start-ups and others valuate their software

• Fixed price– One time licence fee

• User amount based pricing– Registered users – XX USD/1000 registered users– Weekly visits in the site– Step by step pricing

• Revenue sharing (risk revenue sharing)– 10-50% from the client fees



Value chain of mobile services

Contentprovider

Contentpackager

Operator/ISP

Customer

Contentprovider

Gramex orother

AdvertiserTechnicalintegrator



Value Chain and Money in B-to-C

Operator/ISP

Customer

- 5 FIM1,5 FIM 2 FIM 1,5 FIM

Operator/ISP

Customer

- 5 FIM

1,5 FIM 2 FIM 1,5 FIM

Advertiser

Contentprovider

Contentprovider

Contentpackager

Contentpackager




Gramexor other

Operator/ISP

Customer

- 5 FIM

4 FIM

1 FIMContentprovider



“Literary and artistic works“in the Net

WorksThe IPR owners

can decide upon using and

performing the works in the net

IPR ownerswriters, composers, artists,

performers, AV-producers, etc.(The representatives maintain

register of works:Gramex, Teosto, Kuvasto, Kopiosto)

Service providersUtilize the works in creating content:

Responsible for the protectionFees to the IPR owners(their representatives)

OperatorsArrange the channels and data transfer

- no fees, no responsibility

Public instutionsLibraries, archives, universities

Compensate internal use (low rates)

ConsumersBrowsing: no fees to the IPR-owners,

but to operatorsPackaged works: pays the price




Contentpackager

Customer

AdvertiserIntegrator

- 5 FIM4,8 FIM0,2 FIM

Content packager has own WAP-gateway (case Keskisuomalainen)

Contentprovider



Operators Revenue in the Following Years

• Where they will make the revenue– Airtime 60%– End user fees 17%– Content 10%– Advertising 5%– Mobile e-commerce 5%– Hosting services 3%

Source: Ovum



Mobile service start-ups

• No risk money available– Venture capitalists are not willing to fund mobile

technology anymore– Where is the revenue?

• Clients are not investing– Operators are not investing at the moment– 3G licence and network costs are huge– When they are going to buy some applications?

• Bankruptcy?– Many players will go down



How Technology Will Change?

• Faster networks and handsets– Fast access– Allways on connection– Better software in handsets

• Java Card –technology– You can download software to you

handset

• Smart House –concepts– Always with you - manage your house with mobile

phone



Source: Durlacher



Thank you!

Questions and discussion

[email protected]+358 40 3011 135

www.republica.fi © 2001 republica corp. business models for mobile services sami kettunen...

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