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Today’s wireless investment, tomorrow’s bookings? Winning by Sharing Leon Benjamin, Co-founder, DestiCorp Ltd [email protected] – May 2002

Today's Wireless Environment, Tomorrow's Bookings

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Presentation made in 2002 by Leon Benjamin of DestiCorp at the Berlin Eye for Travel event. Outlines the key change forces in mobile - most of which are still relevant today

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Page 1: Today's Wireless Environment, Tomorrow's Bookings

Today’s wireless investment, tomorrow’s bookings?

Winning by Sharing

Leon Benjamin, Co-founder, DestiCorp Ltd

[email protected] – May 2002

Page 2: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Introduction

Leon Benjamin, co-founded DestiCorp with Anna Pollock in 2001

DestiCorp is– A “thinking” consultancy, that develops innovative concepts,

models and applications for the travel and tourism industry– Pragmatists and practitioners who guide our clients through

the turbulent waters of change and dislocation with clarity and concrete action

Our ‘mantra’ is “Winning by Sharing”

Page 3: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Objectives

Provide insight into wireless activity in Europe and how it is reconfiguring traditional business

Describe the prevalent and emerging distribution and revenue models

Discuss how tourism providers can exploit the wireless space

………..and why this can only be achieved by a profound shift in thinking

Page 4: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Presentation Structure

Profile the technology landscape trends– Convergence– Location-based services– Wi-Fi

Assess the business landscape– Market dynamics– New business models

Describe the key components of a wireless distribution strategy– Connectivity, Community, Content and Commerce– Winning by sharing

Page 5: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Technology Landscape

The European mobile phone statistics make attractive reading– 40-75% penetration of mobile phones (Italy & Finland, Iceland now

officially the highest with 76%)– 76 mobile operators in Europe (10 major’s dominate)– 100% penetration in Western Europe by 2006 (Pyramid Research)

– that’s 350m people!– 178 countries now have GSM– Globally, 167m new subscribers in last 12 months

Strong uptake of GPRS (always on) services– 13% of all mobile phone users in the Western Europe (that’s 40

million) will be using GPRS mobile data services by the end of 2003 (Source: Analysys)

– By the end of 2003, however, non-commercial users could outnumber enterprise users, accounting for 80% of GPRS users

Page 6: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Technology Landscape

SMS is still the dominant (data) revenue generator for operators– 10% of total service revenues– Billions of text messages every month – Global Q1 2002 75bn, projected

total for 2002 360bn– In Europe, 90% of these messages are person-to-person with only 10%

machine or application to person Instant Messaging (IM) is the ‘next big thing’ and cannot be ignored.

– 1 in 6 mobile users in Europe currently using IM– 50 million users worldwide – Exploding into the corporate world (100,000 IBMers sending over 1m

messages a day) GPRS and a new standard called Session Initiation Protocol (SIP) will

bring about ‘SMS size’ revenue for operators– SIP ties together email, voice, and messaging– Enables SMS-IM and IM-SMS chat over wireless networks

Page 7: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Market Drivers

What do we as consumers want and need? – We’re information dependent, especially so for travel consumers– We’re task oriented

Choosing a destination Finding a hotel Booking a flight Listening to the news or our favourite music Keeping contact with home or office

– Increasingly, we’re multi-tasking– We don’t sit still

Page 8: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Market Drivers

Consumers are increasingly mobile Need to cut the physical ties that bind them to home or office Shouldn’t need a check list an arm’s length before leaving home or

office: – Have I diverted my home phone number?– Is the answering machine on?– Have I packed my modem cable?– What’s the access code for my ISP dial-up?– Have I synchronised my address book?

I shouldn’t need to carry a sackful of appliances– My computer and work-related files– A PDA for contacts and to do lists– A stereo, music player– Mobile phone

Page 9: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Market Drivers have created….

1. The convergence of appliancesComputer, phone, MP3 player, billing device, browser

2. Location-based servicesRelevant information, when and where we want it and determined by our location

3. Always on – everywhere – and FAST(!) connectivity4. Now we’ll make conscious choices about connecting, soon it

will be unconscious, pervasive Ambient connectivity

Page 10: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

1. Convergence

Devices are converging and morphing into wireless and voice enabled Personal Digital Assistants (PDAs)

Palm still dominant with 47% global market share– Microsoft Pocket PC based devices second behind Palm in Europe….and

gaining – Compaq iPaq, HP Jornada eTForecasts in its report "Worldwide PDA Markets", expects explosive

growth in the form of PDA-phones, a Web cell phone with PDA functionality or vice versa

Worldwide PDA sales to jump from 12 million devices in 2000 to more than 61 million in 2007

They will be multifunction devices with built-in Internet access, digital camera, music player, scanner and other functionality

The hardware capabilities of a typical 2007 PDA will be similar to a 2001 low-end PC!

Page 11: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Convergent Devices

Siemens Java PDA phone

MMO2 (Cellnet) XDA Pocket PC PDA phone

Handspring Treo PDA phonePalm OS

Personal Trusted Devices (PTD)

Page 12: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

2. Location Based Services

A person’s location sets the context for service delivery– Be relevant– Information and services should be Pulled not Pushed!

Online business directories and destination databases are ineffective without geo-coded data (Scoot, Yell, D&B)

There is a massive focus on Location Based Services (LBS)– Network operators (huge future revenue)– Galileo GPS– Webraska, Schlumberger

Geo-coding service providers– Whereonearth.com (UK) can geo-code data to virtually every city in

the world (including Jakarta)– TerraSeek.com in the US

Page 13: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

3. Continuous, Ubiquitous & FAST!

Wi-Fi (Wide Fidelity) networks, or WLANs have literally exploded and emerged as the single most significant development in wireless technology

Wi-Fi networks are short range (100m) wireless LANs running at 10mbps

They enable laptops & PDA’s to connect to the internet by sharing a broadband connection

Cost 300-500 Euros to implement Disruptive technology

– Cheap– Effective, useful– Out of control– Could severely impede the European investment in 3G

Let’s see why

Page 14: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Wi-Fi - Travel Example

Internet/Intranet

Main PC

Hub

Hotel Systems - Italian beach

Personal LaptopHotel room

Kids play area

Wireless Till - Beach bar

Broadband

Wi-Fi Topology

Page 15: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

More on Wi-Fi

Retailers are creating ‘Hotspots’– Most MacDonalds restaurants in the US by end 2002– Starbucks deploying across Europe, 462 stores enabled in US– BT to create hundreds of Hotspots in an around London– BT are rolling out 5,000 broadband subscribers every week

Internet access available via Hotspots anywhere in Cambridge (UK) First internet ‘bench’ in small market town of Bury St Edmunds (UK) Available on Brighton beach this summer In travel:

– Copenhagen Airport is opening its wireless local area network (WLAN) to the public this week. Named CPH-WIZ, Oct 2001

– Federal Aviation Administration (FAA) to provide secure, broadband wireless connectivity between FAA buildings at airports across the US

– VARIG Airlines – email, web access on entire fleet, Nov 2001– Hilton Group to deploy worldwide– Most airports will be provide Wi-Fi access within next 12 months

Page 16: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

More on Wi-Fi

Most of Hawaii is now ‘wired’ with Wi-Fi– “Island of wireless guerrillas”

Individuals are (re)-charging their neighbours to share their broadband

Companies like Joltage.com and Boingo.com are providing a payment and global publishing platform to enable the contractual elements

Anyone can become an ISP serving small local communities Giving rise to Network Area Neighbourhoods (NANs) and

Customer Owned Networks (CONs?) In the US the FCC will soon sanction next generation Wi-Fi that

will operate at higher speeds and greater distances (miles)

Page 17: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Wi-Fi and the Gaming Sector

Sony built a virtual reality gaming facility off the coast of San Diego in 1999 - Norrath

Can accommodate 1m visitors per year Gamers can participate using their PCs at home but need a

broadband connection so Wi-Fi being used from remote areas Wi-Fi took this game from relative obscurity to 100,000 online

at any given moment in time Sony derives $3.6m revenue per month from this community Norrath’s per capita income is roughly between Russia and

Bulgaria Put another way, the 77th richest country in the world

Page 18: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Wi-Fi and Conferences

Conference Facilities will be equipped with Wi-Fi Attendees will be able to:

– Listen, – Publish web logs in real time to share their responses with the

world;– send pictures, instant transcripts, – field questions from non-attendees– Research veracity of speakers’ statement– Make e-appointments for F2F meetings with fellow delegates

Conference as community (an event pulsating in time and space) involving a web of relationships

Page 19: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Technology Landscape - Conclusions

There is massive “liquidity” in the wireless space– Users, devices, services, coverage

Location and context is everything Our entire surroundings are the interface to the network

– Where the TV turns itself down when our phone rings! The creation of a wireless “Digital Canopy” – Wi-Fi, GSM,

Internet, Bluetooth There is a steep learning curve for any tourism or travel

provider – and it’s changing all the time The emergence of standards and intermediaries (distribution

brokers) will enable tourism providers to concentrate on their core competency and content

Page 20: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Current Business Activity

Confusing, very dynamic and fluid! Market activity comprises

– Mobile technology platform providers– Mobile portals – network operators– Point solutions deployed by large corporates and

travel organisations– Payment/ billing solutions

Page 21: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Technology Providers

Infrastructure provided by the ‘usual suspects’ – Nokia, Ericsson, Motorola

Gateway products that deliver content, applications, provisioning– OpenWave, Phone.com, Aether Systems, Passcall, Airflash, Brience

Air2Web platform used by Best Western– Customer self-service solutions– eCRM

Autodesk Location Services has announced a location-enabled Short Messaging Service and MMS (Multi Media Messaging) solution

– Short command for retrieving hotel options based on location. With a suitable PDA/phone, a traveler would be able to view photographs of the hotel's facilities.

Page 22: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Mobile Portals

Every operator has one!– Vizzavi (Vodafone & Vivendi), O2 (BT Genie), Telia, Sonera,

MobilStar, T-Plus, DT Every major web portal has one!

– MSN, AOL, Yahoo, Tiscali Lots of ‘pure play’ portals and ASPs

– AvantGo, Breathe, Room33, Aspective The manufacturers are in on the act too

– Nokia Club – a community portal– Sony Ericsson

Page 23: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Mobile Portals

They have common features– Content – news, stocks, weather, music, etc– Logos and ring tones

These mobile portals are not really making money– Content is largely free– SMS is mostly person-to-person– Cannot live by advertising, ring tones and logos alone– Vizzavi has now invested around £1 billion, revenues from

services are in the low millions (£1-3m) The core revenue model is based around sharing traffic

revenues generated by end user ‘pull’ of content– Very successful for NTT DoCoMo (iMode)

Page 24: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Point Solutions – Content providers

Corporate Solutions– United Airlines EasyUpdate feature offers Mileage Plus

passengers latest travel information via the Web, a wireless device, or telephone, at any point on their journey

– CabinLINK, an in-flight, e-mail and Internet browsing service for corporate and private airline passengers, Tenzing collaborating with Singapore Airlines and Air Canada

– BA check in services (WAP)– Variety of wireless based eTicketing

UK, Odeon WAP booking service UK, Hull City Council collaborating with Ericsson to deploy first mobile car

parking payment scheme Smaller travel/tourism related service providers

– Kizoom – for UK rail timetable – 0800taxi.com – UK taxi cab firm database (WAP/SMS)

Page 25: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Payment Models

Frost & Sullivan prediction: Electronic commerce conducted via mobile devices such as phones and PDAs will take off over the next few years to become a US$25 billion market worldwide by 2006. M-commerce will account for 15 percent of the world's online commerce in sectors including;

– automated point-of-sale payments (vending machines, parking meters and ticket machines)

– attended point-of-sale payments (shop counters, taxis) – mobile-assisted Internet payments (fixed Internet sites

using phone instead of credit card) – Reverse Billing– peer-to-peer payments between individuals

Page 26: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Payment Models

Micropayment applications are key and there is huge activity in this area

– Reverse billing: Jupiter predicts that by 2006 consumers will spend 3.3bn Euros using mobiles as a content billing platform

– Nochex & Payhound (email money)– Paypal, Compaq’s Millicent– BT Microbilling – services on your blue bill– Vodafone mobile wallet (macropayment solution)– Freedompay, Nokia & MacDonalds in the US – “burgers by cell

phone”– Egold.com, Goldmoney.com

Pre-pay or post-pay? Subscription or pay-as-use?– Business plan to provide offer both methods

Page 27: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Wireless Distribution Strategy

So how does a tourism provider exploit the wireless channel?

How do you enrich the customer experience? What are the key steps to get there? How do you reduce transaction costs? How do you minimise the risk of failure?

Page 28: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Wireless Distribution Strategy

1. Shift Your Thinking, Change Your Perspective from:

Enterprise to Business Web Product to Customer Competition to Collaboration Push to Pull Controlling to Enabling

Page 29: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Destination Web

• A Destination Web © is an electronically inter-connected community of autonomous but interdependent, travel-related enterprises that collaborate in order to provide value to visitors, profit for providers and partners and benefits to the host community. DestiCorp

Page 30: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Listening to the Customer (Cluetrain)

Markets consist of conversations

“A powerful global conversation has begun. Through the Internet, people are discovering and inventing new ways to share relevant knowledge with blinding speed. As a direct result, markets are getting smarter—and getting smarter faster than most companies”

People in networked markets have figured out that they get far better information and support from one another than from vendors

Companies that don’t realise their markets are now networked person-to-person, getting smarter as a result and are deeply joined in conversation are missing an opportunity

Page 31: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Communities that Converse

Why create these communities? They are being taken seriously outside travel

Hallmark cards created a ‘listening’ community to understand how its customers celebrate Valentine’s and discovered a chasm between the fantasy they sell in their cards and what people really do

– “revolutionize our understanding of how people learn and how market research should be conducted”

– Hallmark is reducing the risk of getting it wrong by asking its customers what they want – this is helping it triple sales over the next 5 years

Proctor & Gamble with PG.com also created a listening platform that captures better insights faster builds advocates for our products provides feedback that contains “disproportionately rich ideas”

There are many thousands of these communities with a vast array of interests and subject areas

– Travel with Kids.com– Sift with Travelmole.com & Ebay.com– Hermail.com

Page 32: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Put the Customer at the centre

Trips/Tours

Sp

ort

s

Financial Services

Inst

ant

Mes

sagin

g

Networking/D

ating

Food &

Events

Med

ical Services

Sleep

Music

Guest

Co

nsu

lar Services

Co

mm

un

ity & C

on

tent

Business Services

Blogging & Messaging

Fut

ure

Web

Ser

vice

s

Fut

ure

Web

Ser

vice

s

DIGITALCANOPY

Pull Vs Push

• Now your customer is able to pull an experience toward him/her • At the right time, location and context• Enabled by an interconnected Digital Canopy• We call it Winning by Sharing

Page 33: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

The Destination as Community

DestiCorp believes that Destinations are in the best position to create these communities

– Closest to the providers and the guests– Local knowledge & Relationship Capital

But they lack the skills and knowledge to implement them A Destination based community should be a place where a guest can

interact, before, during and after their trip– What’s happening here? Cool events? Good deals?– What have people said about this location and its services?– Who’s coming? Do they share my interests? What’s their IM address?– Can I share my experiences (blog)?

Create the conditions for emergent behaviour– “You want us to pay? We want you to pay attention”

Page 34: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Five Essential Ingredients

1. CustomersWho are they; what task are they trying to complete?

2. ContentHow can we deliver the content they need, when, where

and how that’s relevant and convenient?3. Community

What other providers and providers do I need to work with to satisfy my guests’ needs?

4. CommerceHow do I make the transaction profitable for all parties?

5. ConnectivityHow do I make it possible to “converse” via multiple

channels, touch points and provide seamless service?

Page 35: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Concluding Observations

This is a big, complex, very fast moving space! It will be impossible to absorb and understand all of it

– and you don’t need to! Far more important will be your ability to collaborate

– Internally in order to innovate– Externally in order to get the most from partners

Your focus on the customer This will be about ‘plug-and-play’ business Wireless is an important channel – but not the only

channel

Page 36: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Final Thoughts

How do you compete in a world of perfect information?

– Not by price but by perceived value– Through an obsession with the customer– By focusing on core competencies– Through collaboration– By building trust & reputation

Today’s wireless investment, tomorrow’s bookings?– Yes, but it’s a journey not an event

Successful internet businesses will be those that hunt in packs

Page 37: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Destizone.com

Global electronic community of industry leaders and thinking professionals

A gateway to further knowledge providing members with easy access to articles, books, reviews, discussion, experts

Engaged in all facets of the tourism industry willing to question, to learn, to share knowledge

Page 38: Today's Wireless Environment, Tomorrow's Bookings

Leon Benjamin: [email protected] – May 2002

Thank You

Leon Benjamin, Co-founder, DestiCorp Ltd