1. About Mobile Futures Heikki Hämmäinen HIIT Haukilampi May 19, 2005

2. Visions of media convergence
Big Pipe
Single channel
Unified value nets
E.g. Internet
Big Box
Single terminal
Several channels
Smart or dumb
E.g. Linux/Java
Big Company
Global company
Single ecosystem
E.g. Vodafone, MS
Big Pipe may happen as Internet evolution
Big Box may result from the operating system battle
Big Company may get control of Big Pipe and/or Big Box
Ecosystems grow and die slowly
Governments may interfere
Technical development has enabled the convergence of different types of networks and terminals. When and how this will happen is an open question.
Big Pipe vision denotes the all-IP evolution which may attract broadcasting and telephony traffic to Internet.
Big Box vision highlights the integration of all terminal functions (phone, TV, PC) into a single platform, e.g. a pocket terminal. At least initially, a Big Box gets connected to different channels for voice (GSM), data (IP/GPRS), and video (DVB-H). Multiple operating system platforms (e.g. Windows, Mac OS X, Linux, Symbian) are implementing the Big Box, but the number of different platforms may decrease as the technology matures.
Big Company vision observes that the ICT industry involves strong network externalities visible as “winner takes it all”. A Big Company controlling major parts of the communications value net may emerge from the Big Box scenario (e.g. Microsoft, Nokia) or from the Big Pipe scenario (e.g. Vodafone, NTT DoCoMo).
Governments are not likely to allow the dominance of Big Company. They may interfere using regulatory measures to adjust competition.
Source: P Longstaff, 2003

3. Usage Goes Wireless
Wireless hotspots turning fixed networks into mobile
Handsets connecting to hotspots (e.g. WLAN, BT, UWB)
Wireless laptops replacing desktop PCs
Mobile handsets expanding to multimedia services
This year’s high-end handset becomes next year’s low-end
New consumption of pictures, video, music
New production of pictures and video
Internet becoming accessible via mobile handsets

4. Adoption of New Handset Functions Case Finland
Source: LEAD project, 2004

5. Personal profiles managed in the handset?
Usage Goes Personal
Personal wireless laptop
Personal mobile handset
New personal usage
Interactive TV (traditional TV “group terminal” losing)
Location-based information
Networked person-to-person (games, chat, presence)
Micro-payments in the real world
Personal profiles managed in the handset?

6. How do I manage my world? WWW Browse My bookmarks My phonebook
My landmarks
Communicate
Track

7. Case Japan Daily Mobile Internet Usage Time
Minutes/day
Female
Male
Overall
<5
48.28
56.07
53.85
5-10
22.06
19.86
20.49
10-20
13.78
9.88
10.99
20-30
8.20
5.74
6.44
30-60
4.68
4.25
4.37
60-90
1.27
1.44
1.38
>90
1.72
2.76
2.46
More than 50% of users use less than 5 min per day
No clear correlation
between time of day and content
between amount of usage and content
Source: MoCoBe.com survey, 2003

8. Case Japan Daily Mobile Internet Usage (%) by Location
Usage follows the duration of presence (except commute)
No clear correlation between usage location and content
Source: MoCoBe.com survey, 2003

9. Household spending Communication as % of household consumption (OECD average)4%
Content? 3%
Internet 2%
Mobile 1%
1970
1980
1990
2000
Source: OECD

10. Complexity of Buying
GSM business model for person-to-person services has been stable and understandable to consumers
Market for mobile content is still fragmented technically and business-wise
Open issues
End-to-end harmonization of the service architecture
End-to-and harmonization of the value network
Harmonization of micro-payments (e.g. authentication)

11. Consumer’s Confusion Terrestrial operator Service providers
Local teleoperator
Satellite operator
Cellular operator
Content operator
CATV operator
ISP
Legend
Core business
Likely expansion
Possible expansion
Services
Home telephone service
Broadband Internet access
Value-added Internet services
Terrestrial TV broadcast
Cable TV broadcast
Satellite TV broadcast
Cellular service
Multimedia content

12. Traditional Payment Systems Case Finland
Value(€)/
Transaction
Nordea Internet bank (c. 300€, 4trs/month) 50
VISA credit card (45 €, 6trs) 5
Cash
Mobile handset (0.3 €, 50trs)
0.5 15 30
Transactions/Month
Role of cash decreasing very slowly
Mass of micropayments to be optimized

13. E-Commerce U.S. on-line payment market –merchants view
VISA has over 50% marketshare of all Internet payments (ref. ”Verified by VISA”)
Source: Gartner Group, 2002

14. E-Commerce vs. Digital Content Japanese on-line market – wired vs
E-Commerce vs. Digital Content Japanese on-line market – wired vs. mobile in 2001
Mobile
content
market
¥110B
Wired
e-commerce
market
¥706B
Wired
content
market
¥32B
Mobile
e-commerce
market
¥115B
Mobile Internet
23%
Wired Internet
77%
Mobile content much bigger than wired content !
Source: ECOM, Natsuno, 2003

15. Thanks!