Mobile Payments, Google delivers, User Interface, eBooks & more
The Balkanisation of Mobile Payments
We’ve been looking at payments again for a client project – and there is a huge amount going on. It’s clear that a key part of the GAFA vertical stack is likely to be payments – Google are there already with Apple expected next. But this hunger to get involved in mobile money is starting to run into problems.
This week we have seen Google asked by Verizon not to include their NFC enabled wallet on their new flagship phone; the Galaxy Nexus. Everyone is quick to say that this is not blocking – which would be illegal – but it highlights a problem we see growing next year. As operators push their own wallets will this effect device manufacturers plays? Does the JV between Orange, O2, Vodafone and TMobilepreclude Nokia launching an enhanced Money service in the UK?
And the other side of the coin is how people can use these various wallets. Google have partnered with various US retailers to have them install NFC readers. Will Google allow these to work with iPhone NFC wallet expected for iPhone 5? Or the Isus wallet from the US operators?
As Amex customers know, it can be frustrating to find your credit card isn’t accepted everywhere. So how will people react to finding that the wallet on their Nexus can’t be used somewhere , but an iPhone one can?
We’ve said for some time we can’t see the business model that will drive wide installation of NFC readers; the chip and pin system was funded because it transferred responsibility for credit card fraud from the banks to their customers – so it was a good investment for the banks. For someone like Tesco to invest in NFC readers they need to know that a high proportion of their customers will use them. If you need a different one for each wallet then it is never going to happen.
Obviously at some point people will have to collaborate and standards will emerge. We think this will take some time and will hold back NFC ( we are already seeing big brands choose to develop mobile payment services that don’t use NFC). The smart people at NMA venture that NFC could be a Betamax technology.
But we believe that people will keep trying to be successful in this space. Why? Data.
Knowing what people buy is hugely valuable data. As well as closing the loop on ad effectiveness (linking up purchase with ad exposure remains the holy grail) it also allows you to target offers much more accurately.
Right now Amazon make their recommendations based just on my Amazon purchases – how much more powerful would they be if they included the music I buy from specialists? Facebook credits are evolving quickly and that could turn into a means of paying. So far we haven’t seen any moves by Amazon to extend their payments system but we expect them to evolve their Webstore product to enable customers to buy, using their Amazon account, on the Amazon smartphone and the Kindle Fire.
Payment is a key layer in the vertical stack.
Another step in the GAFA battle this week with rumours that Google are trialling a delivery service. This seems a fairly natural extension of their core search business, that would drive new revenue and, again, provide valuable data.
This is another example of business models trailed unsuccessfully in the dotcom boom being reinvented to take advantage of the much bigger numbers now online. Kozmowas a delivery service in major cities in the late 90s. Groupon is, essentially, a new version of LetsBuyIt.com. And ASOS is not unlike boo.com – but without the extravagence – or the Gurkhas.
Facebook acquires GoWalla
Last week we pointed out that Facebook didn’t have too much time to get mobile right if they were to keep ahead of the competition . This week they bought mobile start up Gowalla. Maybe it’s a coincidence?
Whilst all the stories say they are shuttering the Gowalla location focused service, the product experience of the team will be just as useful as their design skills.
It’s also worth taking a few minutes to watch this interview with Facebooks Sheryl Sandberg and see how she deftly avoids denying the Facebook phone rumours.
New paradigm in user interface
Following our focus on SoLoMoPho last week we’ve spent a lot of time on Path and we’re hugely impressed by the user interface. And then the iPhone version of everyones favourite iPad app arrived. Flipboard, again, has a beautiful interface that’s a delight to use.
On HTML5 new data confusingly suggests that I billion HTML5 capable phones will be sold in 2013. As the comments discuss, the full version of HTML5 is a little way away which is why we are now using the term HTML5 lite to describe CSS driven work.
Tesco is rolling our WiFi in every store. We spend a lot of time watching Tesco as they are being very smart around mobile – and have been testing the implications of wifi since last year. This is a much more mature approach to retail than people like BestBuy covering up barcodes in the hope people won’t indulge in MECommerce
* Mobile Enhanced Commerce, where people use their phones to read reviews and check prices etc, will be worth around $110 billion in Europe in 2011.
eReaders and eBooks
Our session at the excellent Futurebook conference this week focused on how people are changing the way they consume content with mobile devices. Since we did a big strategy project for Anobii last year, we hadn’t looked too closely at the ereaders and ebooks market and our prep for this talk was very illuminating. The ereaders market is really interesting with Kobo and Nook taking the fight to Amazon. Whilst Amazon don’t release any figures on Kindle sales we found that the Nook is a $220m business for Barnes & Noble.
John Battele argues that GAFA should be the Big5, to accommodate Microsoft. We think they need to make a success of Windows Phone first.
The Economist has a good piece on the iPad, with some interesting speculation on on the iPad 3.
Business Insider have a good collection of stats on the future of media.