Follow the mobile money CS5011/CS4032: Mobile Computing Bruce Scharlau, University of Aberdeen, 2013

There are two sides to this coin Money generated by the mobile ecosystem Money used by people in their daily lives tied to the use of their mobile Bruce Scharlau, University of Aberdeen, 2013

Mobile applications reduce friction Bruce Scharlau, University of Aberdeen, 2013

Smartphones overtake PCs Bruce Scharlau, University of Aberdeen, ewsroom/half-billion-pcs- ship-2013-tablet-sales- rocket opment.com/archives/16 57

Mobile almosts matches population Bruce Scharlau, University of Aberdeen, away-preparing-for-the-biggest-number-ever-yes-that-day-is-near-whe.html

Mobile applications are becoming more popular Bruce Scharlau, University of Aberdeen,

Bruce Scharlau, University of Aberdeen, 2013 There are a lot of mobiles 5.5 billion handsets (including1.2bn smartphones) with global population of 6.8 billion Above 100% mobile rate in developed world 59% in emerging world Emerging world still on WAP for data – this is were 5.6 billion people live Near New Years 2013 will be one phone per person installed-base-in-2012.html

All are SMS capable Bruce Scharlau, University of Aberdeen, installed-base-in-2012.html PREVALENCE OF SELECTED FEATURES OF THE INSTALLED BASE SMS capable handsets % MMS capable handsets % Cameraphones % Bluetooth % FM Radio % 3G or faster cellular % WiFi % Touch screen interface % Smartphone % Dual SIM % Source: TomiAhonen Phone Book 2012 This data may be freely shared That means 4.4bn camera phones

Price for mobile touch all ranges Bruce Scharlau, University of Aberdeen, installed-base-in-2012.html smartphones are fighting over the 11% band HANDSET PRICE PYRAMID 2012 Premium Smartphones... over $ % Mid-price Smartphones... $150-$ % Low-cost Smartphones... $80-$ % Featurephones $40-$ % Ultra Low-cost Phones... under $ % Source: TomiAhonen Phone Book 2012 This data may be freely shared

Zero to $1trillion in 28 years Mobile industry only 28 years old Fixed line moving to mobile Internet moving to mobile Media content moving to mobile Bruce Scharlau, University of Aberdeen, 2013

Lets breakdown the 1.1trillion 900bn service revenues –625bn call revenue –175bn mobile messaging –100bn mobile data 200bn for hardware –160bn handsets –40bn network infrastructure Bruce Scharlau, University of Aberdeen, 2013

SMS makes lots of money Mobile messaging is broken down with –120bn SMS –35bn MMS Bruce Scharlau, University of Aberdeen, 2013

Mobile data is bigger than internet 275bn data revenues means its bigger than internet related advertising, content and access fees (ie broadband and dial up) 98bn from premium data (4x whats paid for on internet) 5bn from ringtones (2.5x what iTunes makes) Bruce Scharlau, University of Aberdeen, 2013

Average RPU is $13/month Average phone user pays $13/month –$50/month in US –> $5/month in emerging countries –$1/month in Nigeria and Bangladesh (and companies still make money…) Bruce Scharlau, University of Aberdeen, 2013

Over 1 billion new handsets/year 1.3bn new handsets a year About 16% are smartphones Bruce Scharlau, University of Aberdeen, 2013

Mobile banking developed most in developing markets Right were banking didnt have vested interests in established practices (leapfrog) WAP experiments in 90s not go anywhere Czech Republic and S Africa – SMS alert when money being withdrawn from ATM – then nationally in Philippines Phone wallets in Japan in early 2000s Still developed catching up with developing Bruce Scharlau, University of Aberdeen, 2013

Virtual money greater in developing world too Habbo hotel of Finland the oldest which predated Second Life and has 175mn users all under 15 and generates $75mn from premium SMS for in-game purchases Forerunner of Farmville, etc Bruce Scharlau, University of Aberdeen, 2013

M-Pesa provides virtual real interface Started in 2006 as banking for unbanked – now 58% use mobile banking Deposit real money to account and w/draw or transfer to other m-pesa users via SMS No more moving real money around where even $2/day wage was target for theft Now represents around 25% of GPD Bruce Scharlau, University of Aberdeen, 2013

Every phone becomes payment terminal with mobile money Swap money via SMS at market, shop, etc The change has to come from operators – every phone can authorise payments and evey phone can receive payments Bruce Scharlau, University of Aberdeen, 2013

Virtual to real change Buy credits in shop means shops (G-cash, M-Pesa, Smart Money, etc) can sell you airtime, etc which means they have too much cash Let people withdraw money against airtime means cash goes out – solves problem (banking without banks) South Korea – most advanced – has credit cards on sim card so can move/pay with phone and not need physical card Bruce Scharlau, University of Aberdeen, 2013

Mobile reduces crime Already mentioned Africa and m-pesa means less crime as people dont have cash Works with machines too: parking meters all mobile in some countries – reduces crime against meters Sweden now has mobile bus fares – and end of cash (reduce waste of metal, paper, etc) Bruce Scharlau, University of Aberdeen, 2013

Mobile applications reduce friction They make life easier Bruce Scharlau, University of Aberdeen, 2013