Books I have co-authored

Ahonen: “This is the golden age of mobile”

The mobile guru and former Nokia executive Tomi Ahonen has released his new book ‘The Insider’s Guide to Mobile‘ as a free ebook for download. It is an excellent overview of the mobile industry and mobile market opportunity. Its tech evangelism style can be slightly annoying but he presents rather compelling arguments to back up his claims. For example, that there are 3.7 billion unique users of mobile, almost twice the number of Internet users (1.8 billion). With strong growth and a total market size of 1.1 trillion dollars, the mobile industry is one of the most attractive industries on the planet. Ahonen has identified 13 other industries worth 5 trillion dollars that will be disrupted by mobile in a tidal wave convergence during the next decade. Here is a quote which provides a good summary of the book:

“This is the golden age of mobile. It is the best economic opportunity of our lifetimes.”

Ahonen provides an important counterweight to the Net-centric evangelists from the US West Coast who don’t understand telecom and dismiss it as a dinosaur industry. For example, just the revenues from SMS at 100 billion dollars is almost as much as the combined size of the music industry (20 BUSD), Hollywood movies (25 BUSD), video gaming including consoles (40 BUSD), and all paid content on the Net (27 BUSD). MMS (which has been called a failure) has already grown to 31 billion dollars and is larger than the entire music industry.

While most web-centric players struggle for more income with meager advertising as their main revenue source, mobile service providers get paid by the users and rarely have the same problem. One example is Real Madrid’s fan club. They charge 12 Euros/month for their mobile service and have 100,000 paying users. Another example is the three major mobile social networks in Japan (Mixi, Mobage Town, Gree). They have revenues of around 250 – 350 million dollars each. Even though these Japanese services can be accessed via the web, 76 percent of the users only use their mobile to reach the service. Advertising is a minor part of revenues. Virtual goods and virtual currencies are far more important.

Ahonen’s main message is that “mobile internet” is not the same as the PC-based web through a phone. Mobile services are something different. They take advantage of the unique features of mobile that can’t be replicated on the PC-based web. On the mobile handset identification, messaging, and a payment system are already built-in. The handset is always with you and interaction is much faster. The mobile can be used with one hand, which is impossible with a 3G enabled laptop or netbook. Another example is picture sharing via MMS, which is much more seamless and easier than connecting your camera to the PC and uploading it. Several mobile services are impractical or almost impossible to replicate on the PC-based internet. For example, if you scan a bar code in a store with your camera phone and get a list of alternative vendors for the product you are interested in.

Even though advanced sexy apps on smartphones are impressive, Ahonen points out that only 13 percent of the mobile population has a smartphone. The big numbers and huge potential is in the “boring” SMS and MMS services. The average global SMS user sends 100 SMS/month. Voice traffic is falling from cannibalization by SMS and 13% of mobile users have stopped placing outgoing voice calls entirely. MMS is already used by 1.7 billion users. His advice is that if your company is in an industry where you need to reach the mass market (banks, retailers, airlines, etc.) today the first step should be to develop SMS-based services. After that go for MMS, Wap, xTML (“phone browsers”), downloadable Flash/Java/Brew, and smartphone apps – in that order.

Another area where Ahonen’s arguments go against industry consensus is in his disbelief in Location Based Services. His point is that most users are seldom lost – and if they are abroad the punitive roaming charges deters usage. Users are also very reluctant to allow others to track their position. A few years ago Disney launched a “family friendly” MVNO where parents could locate their children with a child-tracker. The Disney phone instantly became toxic among kids and teenagers and the phones were conveniently forgotten at home, deceiving parents into believing that the kids were home doing homework. Disney shut down the service in 2007.

I find his perspective refreshing, in particular when he extols services that are considered “uncool” by the Netheads in Silicon Valley. It is an easy and almost entertaining read, I highly recommend this book.

Tomi Ahonen’s blogg: Communites Dominate  Brands

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