Apple: Of mobile and web payments and virtual currencies. The future of money transaction
Apple for a while has been rumored to be interested in and working on mobile payments. Given the strength of Apple’s great innovation track record and the influence that Apple products wield over the industry, technology and the eco-system, Apple’s interest in Mobile payments is noteworthy. Time and again, repeatedly, Apple has brought forth innovations in various segments it has operated in viz. smartphones (iPhone), Tablets (iPad), Application (Apps store), Music (iTunes and iPod). Given Apple’s stake in Web 2.0 and Mobile 2.0 technologies, a mobile payment platform is a natural extension, a transaction enabler and the missing piece of the monetization game.
Not that Apple is new to the game. They are already doing mobile payments since they launched the iPhone. Their solution is built on an existing payment relationship – iTunes to download music on the web. Apple’s 160 million iTunes users outweigh Paypal’s 90 million.
Contactless payments or Near Field Communication chip iPhones could open up payments and they could help create new business models for in store payments. This could also couple with location based ads and other applications. Apple drove the development of new business models with the music and smart phones – depending on what they do they could change the rules by which different players interact to do payment and commerce. So they have the potential to move the NFC world forward significantly by developing a new tapestry of the hardware, software and business models to move it forward. While NFC has been on the horizon for a while with sporadic trials by Obopay and others, Apple moving into this space should ignite the market. Apple’s moves will have particularly powerful impact, and the only other player who is also mulling contactless payment solutions at this point is Google.
Apart from Contactless payments, Apple is also trying to specialize in allowing users to use their mobile phone number to purchase digital content on the web using their phone number and their phone bill. Boku, a gateway specialist in Mobile carrier billing is rumored to be in talks with Apple for a possible acquisition.
Then there is this talk of Apple trying to create an online Virtual currency much like the Facebook credits for the Application and iTunes purchases. There are significant volumes in there for Apple and again the eco-system is pretty well set and Apple would only need to put the online currency in place for this transaction system to talk off as well. This would mostly cater to P2P payments transfer, casual payments, payments to individual merchants, cross border remittances and check replacement. In markets where P2P is fully implemented it represents over 50% of the mobile payment transactions. This is a big opportunity and right in Obopay’s sweet spot.
Apple is already big in mobile payments with iTunes and Apps store and Apple would sooner be looking to leverage this play into a bigger pie of online and instore payments.
User Loyalty for Operating Systems: Advantage iOS
Loyalty in the smartphone market is a hard thing to command and come by for handset manufacturers unless you are a certain somebody called Apple. Apple iPhone commands more than twice the fidelity of Android devices or smartphones in general. 59% of iPhone users would like to stay loyal to the iOS as against 25% of other smartphone users with their respective Operating systems.Apple 59% stacks up very favourably against 35% for RIM Blackberry, 28% for Android, 24% for Symbian and 21% for WinMo. The WinMo figure at 21% is a reflection of the WinMo 6.x operating system and as and when WinMo 7.0 gains steam, the loyalty numbers is expected to head northwards.
As smartphone manufacturers scramble to innovate their handsets, offering the best high-resolution cameras, super clear displays and support for the next generation mobile networks, smartphone owners are leaving their options open, especially now that manufacturers are moving towards open-sourced operating systems like Google’s Android software. The differentiator is now starting to move beyond just the OS and the hardware to a host of eco-system factors such as Applications, Developers and Ecosystem, Extendibility across multiple home devices. Finally, the Operating expenses in terms of data plans and data is also a large determining factor for user stickiness around the devices
Photo Essay: History of the Apple Mouse over the years
The Lisa Mouse (1983)
Lisa Mouse Featured in Apple's Products in 1983
The Macintosh Mouse (1984)
The MacIntosh Mouse featured in 1984
The Desktop Mouse (1993)
The Desktop Mouse introduced by Apple. This design was later used by many others
Apple USB Mouse (1998)
Apple USB mouse was introduced in 1998. It complemented the look of the Mac then.
Pro Mouse (2000)
The Pro Mouse was a design that stuck with Apple and was used till some years.
Mighty Mouse (2005)
An improvement of the 2000 mouse
Magic Mouse (2009)
The Magic Mouse in 2009 was the earlier design going extreme in terms of thickness
Magic Trackpad (2010)
The trackpad replaces themouse in thenot so distant future
Profiling Near Field Communication
Web 2.0 Summit (San Francisco, 15th November 2010): Google CEO Eric Schmidt announces NFC integration in the Gingerbread release of Android.
In the same summit, RIM CEO, Jim Balsillie re-iterated “we’d be fools not to have [NFC] in the near term”.
According to reports Apple is also working on the NFC payments domain and would be coming up with their payment product sooner.
In July 2010, Nokia’s Anssi Vanjoki stated that all Nokia smartphones will have NFC from 2011
AT&T Mobility, T-Mobile USA and Verizon Wireless also have announced the launch of ISIS, an initiative to develop a single platform that will enable their combined 200million customers to make mobile payments using NFC with a launch planned over the next 18 months, with a nationwide rollout planned by 2013.
User Acceptance of NFC usages
Near-field Communication (NFC) is characterized as a very short-range radio communication technology with a lot of potential, especially when applied to mobile handsets. Imagine users using the cellphone to interact with posters, magazines, and even with products while at the store, and with such interaction initiating a request or search for related information in real-time. Other usages of NFC include the electronic wallet to make payments using handsets, the same way as with a credit card. NFC makes all this is possible. But NFC is still a young technology. That said, NFC-enabled handsets are being introduced into the market, and deployments and pilots around the world are occurring.
NFC is a short-range high-frequency wireless technology enabling devices to exchange data. It has long promised to enter the mobile phone industry and catalyse many new usage scenarios, from proximity payments and transactions to device pairing and data exchange. But despite gaining considerable traction in Japan, where at least 60 million devices are enabled for proximity payments, NFC has struggled to meet expectations elsewhere. This is despite the technology’s steadily growing presence outside the mobile domain in transportation (for example, London’s Oyster card and San Francisco’s Clipper card) and credit cards (for example, Visa’s payWave and MasterCard’s PayPass).
A comparison of short range communication technologies
The mobile phone’s unique position as the most pervasive item of consumer electronics makes it the logical device for NFC to establish ubiquity. While security remains a concern, the maturation of the mobile phone into a highly personal converged device that contains sensitive personal data and performs many other functions means potential social barriers to usage have largely been overcome. In that regard, NFC represents the basis for the next wave of innovation in the mobile space. This goes beyond the utilization of NFC for payments and transactions, the roll-out of which will be slowed by the associated complexity of commercial agreements and the requirement for consistent payment platforms. Therefore, simple applications that extend the versatility and intuitiveness of the mobile phone are likely to be what captures consumer imagination and drives adoption in the near term.
Examples include:
• Touching phones and other devices to share content, contact details or synchronize data. NFC would be used to initiate data transfer over Wi-Fi or another technology.
• Tapping an accessory such as a headset or speakers to establish Bluetooth pairing.
• “Checking-in” to a location for services such as Facebook and Foursquare. NFC could also enable the tagging of friends by touching their devices.
• Selecting applications to be purchased from a wall display in a store.
• Getting applications, vouchers or product details by touching an advertisement.
The boundless diversity of the scenarios enabled by NFC, coupled with the intuitiveness of “touch and go”, means that NFC represents a technological step as significant as the introduction of Wi-Fi. The ease with which NFC can facilitate data transfer means it is likely to play a central role in the pursuit of “convergence”, as it enables the pairing of devices and seamless movement of content from one to another.
Intel and ARM compete fiercely for dominance of Tablet and Embedded devices platforms
As convergence fuses desktop and mobile computing together, Intel with its desktop monopoly and ARM with its Mobile computing expertise are engaged in a battle to claim the crown in the converged product: Tablets and Embedded devices.
Intel has started mass production of its Oak Trail platform which combines the Atom Z670 microprocessor and SM35 chipset. This is being readied for the Meego OS (in conjunction with Nokia) and could be customized to Windows as well. On a larger scale the Oak Trail would be targeting the Tablets. The battle for dominance in microprocessors has sharper lines drawn. Intel dominates the server and the desktop spaces, whereas ARM dominates the Mobile phone computing. While Intel tries to make incursions into AMD territory of Mobile computing and vice-versa, the next big platform to be designing microprocessors for will undoubtedly be Tablets.
The idea of ARM-based servers is pretty simple: they may be lower-performing cores, but they use less power; and in an era where one of the big defining characteristics is limiting power to the server room, multiple ARM cores might deliver more processing for a set amount of power. Where ARM also gains in the servers market is a bit of help from start-ups who are innovating on the ARM platform. An example is Smooth-Stone/Calxeda which has innovated and produced an ARM SOC (System-on-a-chip), will deliver a 10-fold improvement in server efficiency, on the system level. While this delivers an edge to ARM in terms of big data application servers, the mass markets will still be the typical corporate servers and ARM will take a lot of doing to unsettle Intel – AMD here.It took Intel and AMD at least 10 years to build the x86 platform to dominate the server space, and it would probably take just as long for someone to unseat them. It will also take years to build up the ecosystem that exists around x86-servers from both Intel and AMD.
Even as Intel-AMD enjoy a near monopoly in desktop and servers, Intel’s next ambition was to take on Mobile platforms, which is ARMs stranglehold. 2011 would see Intel announcing the Medfield version of its Atom microprocessor. The Medfield is a 32nm SoC design which means reduced power consumption, and that in turn would make it more appropriate for small mobile devices.Even if the chip has the performance and power to compete, it will take a long time to build up an ecosystem. Almost all the operating systems and applications aimed at phones today are written for ARM-based platforms which seems to be one reason Intel has talked about its software, particularly its MeeGo operating system, so much.
Thus the real competition for the crown of Microprocessors takes place in embedded devices and in tablet PCs which is what both Intel and ARM are targeting so aggressively. Continued here.
Tablets Disruption: Enter Iconia!
Even while the comparison between Android powered Samsung Tab and Apple’s iPad are still doing the rounds of press and blogosphere, Acer delivers the “Touchpad” a completely new Tablet form factor, one with dual screens. The dual touchscreen ICONIA as it is called is powered by the Windows 7 and is extremely close to Microsoft’s dual screen Courier tablet, which has supposedly been shelved by Microsoft.
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The ICONIA lends a certain “ccol” factor to the design and has a virtual keyboard to mange tasks.Instead of a start button, it features the “Acer Ring” which will appear “by placing five fingers on the screen and making a grab gesture.” The “touchbook” comes equipped with a bunch of Acer developed applications including the TouchBrowser, TouchPhoto, TouchMusic, TouchVideo each enhanced with the gesture library. Likewise it includes the apps SocialJogger, My Journal and Scrapbook.This beauty is due release in Q1,2011 and can be a serious competition to the single form tablets.
The Pics are enticing enough and for one I am not sure if I should postpone my iPad purchase till Q1, 2011!!!
Technical details:
Social redefines the gaming domain
Zynga’s m-Cap ($5.51 billion) has reportedly edged Electronics Arts’ m-Cap ($5.22 billion) in NASDAQ a month back. Zynga, maker of Farmville is remembered for its contribution to social gaming and analysts in bouts of enthusiasm have called it “Google of social games”. EA’s identity on the other hand is more of a traditional videogame giant with blockbusters like FIFA.
So then, is this the rise of one social game startup over the fall of a traditional videogame giant? Not quite. This is not about social versus traditional anymore. Instead, let’s look at this match-up as competitors battling it out across new platforms.
EA has been aggressively expanding into new gaming territory, including social. The company bought startup Playfish, then the second-largest social games developer, in November 2009 for around $400 million. The course of transitioning out of being a traditional console game publisher hasn’t been easy for the company and it has been rocked by declining profits, share value and layoffs. Inspite of the fact that turnarounds take time, and EA’s online revenues are looking pretty good. This fiscal year, EA expects its digital businesses — including mobile, downloadable games and social games — to reach $750 million, or about 20% of total revenue. That’s about the same, if not more, than what Zynga’s total revenue is estimated as. And that’s not to mention EA’s more than $3 billion in revenue from console and PC game sales.
Impressed by the success of Zynga and Facebook, virtually all of the major traditional game publishers have begun incorporating social games or elements into their products. In effect, everyone in the industry has become “social”. Seen through this longer-term lens, the competition among these companies will ultimately come down to what it always come down to — who has the better games.
The social games business is a hits-driven one, because players flock to whatever game is new and popular at the time.
That’s still as true now as it ever was. Zynga clearly has a lead in social games with its popular FarmVille title. But even that hit is on the decline in terms of number of users, down more than 25% since its peak. It is very possible we may never see a social game with as many users as FarmVille again because the market is fast fragmenting.
Smaller audiences in games aren’t necessarily a bad thing. A game like FarmVille may have all the users, but the average spend per user per month is low, around 10 to 20 cents. But a social game under an IP that commands a smaller but more loyal user base, like EA’s FIFA Superstars, can see an average as high as 50 cents to $1. And EA has a number of traditionally strong franchises under its roof that it’s been rolling out onto Facebook.
Meanwhile, both companies know that social alone isn’t enough either. It’s about having an entertaining game experience that exists across multiple platforms. To that end, both have been pushing out mobile titles and making acquisitions of mobile game developers. EA, for instance, just bought the Chillingo, the publisher of the popular iPhone game Angry Birds, last week. (Though the purchase did not include rights to the game, which belong to its developer Rovio.) And Zynga bought iPhone developer Bonfire Studios, earlier this month. The company also recently released FarmVille for the iPad.
Zynga has certainly been a rocket-ship of success, achieving what it has in just four years. But that doesn’t mean social gaming is poised to capture the larger market. Instead, Zynga’s success has brought the company to a new level of competition that’s not social — it’s about the games.
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WebOS 2.0: The second coming of WebOS
When Palm unveiled the WebOS for the first time, it was hailed by many as a true competitor to the iOS. However WebOS lost its way with Palm and the HP acquisition of its parent. The WebOS, incredible as it was, was thought to be done and dusted with.For HP, acquisition of Palm as to accelerate their position in mobile phone space, but it was also about webOS. Now, when HP is seriously mulling smartphone options, it has started resuscitating the WebOS from the dead. Call it WebOS 2.0 if you have to, but knowing Palm’s smartphone penchant, there is some promise the WebOS holds which could possibly be just enough to give HP the toe hold in the smartphone melee.
We already have a trend of web and HTML5 really beginning to become a first-class app development and distribution platform – as evidenced by even Microsoft’s new and surprising support for HTML5 standards. Microsoft stunned a few industry watchers by its support for HTML 5 on its IE9. Palm with its nativity in the web and client oriented technology Now, HP is looking to drive WebOS across to lots of form factors and devices to fill the gap between the smartphone and the PC. The blogs are already abuzz with a Palm 4” smartphone concept. HP is also talking about tablets, new phones, and “really interesting new form factors” in 2011 which would then give the WebOS a decent shot at stardom. WebOS and innovative form factor devices: a Potent Combo. According to HP that is not all and HP is fortifying product proposition with the following additions:
1. HP is also hinting at using flexible display technology (refer to FOLEDs) as an important ally. We already have hints from Sony, Samsung and Apple who are already working in the direction of flexible displays.
Video demonstration of HP Flexible Display technology
2. Palm’s online, drag-n-drop development Ares system is a versatile set of integrated mobile development tools hosted entirely in the browser. The Ares features a drag-and-drop interface builder, a robust code editor, a visual debugger, and built-in source control integration. Ares dramatically lowers the barriers for web developers to jump into mobile development and makes building webOS apps even easier and faster than before.
3. HP is also working on application frameworks “Enyo” (Mojo as known earlier), to support apps on multiple form factors. In consonance with Ares, Enyo packs in faster performance, modern and modular design and support across a range of products and screens.
4. Palm also has started wooing developers, inviting them to work on the Enyo framework for design and creation of Apps. While the Mojo is already available,Enyo SDK access program is expected to kick of early 2011.
In over 170 countries globally, HP has atleast 10% of consumer electronics shelf space and Palm and the WebOS are going to be two critical factors that will help enhance HPs presence in the shelf space. WebOS is not only the centerpiece of HP’s mobile vision, but also enables HP to extend WebOS across more products and multiple regions.
How mobility and cloud are disrupting Enterprise Applications
Enterprise Software are typically business oriented tools such as online shopping, online payment processing, interactive product catalogues, automated billing systems, security, content management, IT service management, Customer relationship management, resource planning, business intelligence, HR management, manufacturing, automation and application integration and are used in organizations to increase efficiency of the systems. Now, the advent of mobility is one of the main disruptors of the enterprise apps ecosystem. Companies donot have choices but to support mobility as users expect to have the corporate databases available to them through a mobile client. Not being open to mobility is a distinct disadvantage which lot of the large organizations can ill-afford to have.
However building mobile enterprise apps is different from traditional apps and a lot of change needs to take place to ensure smooth delivery on the mobile platform. For instance, it is not enough just to push data to a mobile browser. That would only serve as a short-term solution. Enterprise application developers need a different mindset when creating mobile applications which must encompass added focus on data efficiency and security. Security will prove especially challenging because the underlying technology for mobile technology is not as secure as it should be. Therefore, app ecosystem and mobile platform stakeholders will need to push to make their platforms more secure.
Apart from understanding security issues, developers also need to consider the cost of pushing data to the mobile device and develop apps that are more bandwidth efficient. Apps developers for individual consumption donot think about a data constraint when developing the app and its execution process. However for enterprise apps, the developers mindset with respect to data consumption needs to be frugal much like the Cloud computing counterparts. SaaS (Software as a service cloud developers) tend to be a little more efficient about data on the web and understand that all data pipes are not that fast.
On a future perspective, one can see enterprise apps wholly migrating to the cloud such that the market for cloud computing enterprise apps will include cloud services from different vendors by combining products from different vendors and different platforms. This approach would put pressure on the legacy enterprise software vendors.
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