Friday, 2 July 2010

Mobile business models

We all know that the world of devices is going mobile. Desktop PC sales have slowed while those of notebook versions have increased over recent years. The smart phone has also dominated the device in people's pockets and tablet devices are now taking off as a more intimate way to use a computer that is carried with you.

As these trends continue, business models need to adapt to so that users' experiences are good, especially in the context of wireless network connections to the increasingly important 'cloud'. The computing industry has tended to embrace these types of changes more readily than the telecommunications industry. Apple's original iPhone, didn't just reinvent the phone (device) but also the business model that the cellular operators had assumed before then. This included data tariffs, customer support ownership, and connection transparency.

There has been one sorry state of affairs, bolstered by an ugly cartel, that has blighted the mobile cellular network business model for mobile devices however; that is the international roaming charges. These are incurred when you take a mobile (cellular networked) device outside of your home country and continue to want to use it in the same way as usual. In practice consumers have chosen to be very wary of this (on vacations and visiting family abroad) and businesses have endured ridiculous costs when their employees have travelled (for meetings abroad etc.). The European Union has spent a considerable time investigating such charges by mobile cellular operators and have finally come up with a ruling. Unfortunately it reduces the prices that can be charged for calls by only tiny amounts (a few pence for UK users) and states that operators should cap and then cut off data connectivity altogether for users who incur a few tens of pounds (euros or dollars) of data usage when an arbitrary level of use is reached. This is not exactly the radical change that is needed.

Mobile devices with continuous connectivity will continue to be most important in the future. The current system of charging and business models has to be broken across international boundaries. It needs the same radical change that the original iPhone stimulated in other areas of business models. Perhaps it needs to be achieved the same way ... through developments in the marketplace, as it seems like leaving it to the regulators is pointless.

1 comment:

arshad said...

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