Nº 2 2013 > Mobile marketplace
Offering what users really want?
The Mobile World Congress, held in Barcelona from 25 to 27 February 2013, pitted manufacturers against each other in showing off their latest offerings in smartphones and tablets. In the applications field, mobile money services are vying for customers, while the ability to attract advertising skews all the financial reasoning. Ultimately, the winners will be those who have understood what users really want.
Mobile money — cash, card or smartphone?
Africa is a leader in the use of mobile money. Fixed-line networks are poorly developed, and the continent’s one billion people are becoming avid users of mobile phones, which many people rely on for financial transactions.
Mobile money technology is set to become more sophisticated. MasterCard expects to start rolling out MasterPass, a new digital payment system, at the end of March, initially in Australia and Canada. The system will work on a wide variety of devices, including smartphones. Customers’ banking and personal data will be stored online in a “secure cloud”, and so will be on hand to pay for purchases made in a shop or on the Internet, without the need to provide bank details or delivery address. Payment can also be made by waving a smartphone equipped with near-field communication (NFC) technology near a special reader.
Banks and stores will be able to issue their customers with MasterPass-connected “digital wallets”, which will accept credit and debit card information, including from cards other than MasterCard, according to the MasterCard group.
Taking another approach, Visa and Samsung have joined in a global alliance to enable people to make payments with NFC-equipped Samsung smartphones. According to the agreement between the two companies, the next generation of Samsung mobile devices will be equipped with Visa payment technology. This includes pre-loading Visa’s contactless payment system — Visa payWave — in Samsung mobiles.
Banks will be able to transmit payment account information to a secure microchip embedded in Samsung devices. Bank data security will rely on secure systems implemented by Visa and Samsung — Visa’s Mobile Provisioning Service and Samsung’s digital key management system.
ABI Research forecasts that 1.95 billion NFC-enabled devices will ship in 2017, and Visa expects the deal with Samsung to “significantly accelerate” the availability of mobile payments globally.
A different approach is being taken by PayPal, an eBay subsidiary, which has announced a new device that lets cash-based businesses accept PIN-number based “smart” debit and credit cards.
To use the technology, merchants will have to buy the device, which they can then pair with their Android or iPhone smartphone once they have downloaded a Paypal Here application. The device will be able to accept secure payments and issue receipts, while PayPal will receive a “small fee” for each transaction.
In the United States, an older system using PayPal technology has been in use for payment cards that are swiped, but the system is unable to handle cards with embedded microchips and PIN numbers.
Cutting costs — in search of a bargain
Attracting customers means providing devices that they can afford, so price is a challenge for manufacturers.
Huawei has launched a smartphone adapted for Africa, the 4Afrika, running on Microsoft’s Windows Phone operating system and with a four-inch screen. Specially adapted for each market, the Nigerian version has a dictionary for the local Yoruba language and local news, along with an application related to the popular low-budget movie industry, called Nollywood.
According to Microsoft, the 4Afrika smartphone sells for less than USD 200 and is already available in Angola, Egypt, Côte d’Ivoire, Kenya, Morocco, Nigeria and South Africa.
Nokia is also trying to lure buyers with lower prices. Nokia has released two Windows Phone-operated smartphones. The Lumia 520 will cost EUR 139 before tax, while the more sophisticated Lumia 720 will have a pre-tax price tag of EUR 249. But Nokia will also offer a mobile handset — the Nokia 105 — for only EUR 15. This simple phone is designed for people who mainly just want to make telephone calls.
Meanwhile, Huawei and ZTE are gaining market share by offering touch screens, fast processors and better cameras at prices around USD 100. Huawei claims that its Ascend P2, priced at EUR 399, is the fastest smartphone on the market. It has a thickness of just 8.4 mm, and the company says that it can achieve speeds of 150 Mbit/s, fast enough to download a two-hour high-definition movie in less than five minutes.
Handbag phones and pocket tablets?
Smartphones are getting bigger, while tablets are shrinking. Some of the latest tablets can now also be used as phones.
Huawei’s Ascend Mate — with a six-inch screen — was the largest smartphone exhibited at the Mobile World Congress. Next biggest was ZTE’s Grand Memo, with a 5.7-inch display. The 5.5-inch screen of LG’s Optimus Pro put it in third position.
These big phones may be hard to hold and difficult to squeeze into a pocket, but they fit easily into a handbag and tend to be favoured by women, especially in Asia.
Shipments of smartphones are predicted to hit one billion this year, while more than 120 million tablets were sold worldwide in 2012, up 50 per cent from the previous year, according to Deloitte.
Among tablets, Samsung’s Galaxy Note 8 has an eight-inch screen, competing with Apple’s new iPad mini.
The blurring of boundaries between smartphones and tablets, both in size and functionality, has prompted journalists to coin the term “phablet” to cover the whole range of new devices from large smartphones to small tablets.
Mobile advertising — we know where you are
With mobile devices increasingly being used for shopping, banking and travel, consumer behaviour is changing. Picking up on those changes, mobile advertising is becoming ever more sophisticated. The days of short text messages to alert consumers to products or services are drawing to a close. Now, owners of mobile devices are being targeted by interactive videos.
The greater screen space generally offered by tablets is attracting advertisers, to the detriment of smartphones. According to a forecast by Deloitte, in 2013 tablets will generate USD 4.9 billion in advertising revenue compared to nearly USD 3.4 billion for smartphones — and the gap is expected to widen.
Online activity reveals the whereabouts of consumers, with a high level of precision — not only the location, but also the speed at which the person is moving and even the person’s height above sea level. This enables advertisers to tailor and personalize offers to users, depending on their tastes and in the context of their location in real time. “If you arrive in a shopping centre car park, we can offer you information about available parking spaces. When you are on another floor, we won’t offer the same type of service”, says Thomas Husson, an analyst at Forrester Research.
For mobile advertising to be successful, customers must see offers as being helpful, not as invading their privacy. Advertisers need the information that flows in from the customer’s smartphone or tablet, and so it is in their interests to follow a strategy that makes people willingly to share their data.
Tablets and smartphones are must-have personal devices. They travel along with people in their hands or pockets or bags. Advertisers don’t decide what device people will use to connect to a website, and so brands have to adapt to this new environment by optimizing their websites for a range of portable devices and by learning to interact with consumers in real time. This calls for a change in culture and specific skills, which also means substantial investment.
The trends revealed at the Mobile World Congress show that the mobile market is fast-moving and dynamic. Competition is fierce, and it will be interesting to see which players prevail. — Source: Agence France Presse (AFP).