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Pre-Conference Workshop
Combating the entry of Apple into the mobile market through apps, and the importance of managed services in maintaining the competitive edge
Introductions
• Kenneth Plunk – CEO KPI Consulting-KPI Consulting started 8 years ago and has
been focused on the telecommunications carriers and mobile developer since that time. We work with the top mobile carriers worldwide and currently run the web infrastructure for many of them. We are hardly a recognized brand to consumers, because we believe that carriers are the one that need to be recognized by the developer community.
Agenda
• 8:30 - Registration and refreshments• 9:00 – Introductions• 9:15 – Competing in an alien world (Break into groups)
– Adapting the business model to operate successfully against alien competitors, such as Apple
– Preventing the relegation of operators to ‘bit pipe’ status through apps ownership
• 11:00 – Networking break and refreshments• 11:30 – Using applications to increase revenue
– Becoming an apps portal to maximize ARPU and differentiate brand– The importance of a quick time to market
• 13:00 - LUNCH
Agenda Continued
• 14:00 – Developing the right apps for your market (Break into groups)– Targeting the consumer/enterprise segments: what do your
customers want?– Matching applications and VAS to your brand strategy.
• 15:00 – Networking break and refreshments• 15:30 – Using Managed Services to enable competition in the
apps market.– Managing developers and apps without the internal support
infrastructure.– Assessing the competencies required from apps Managed Services
vendors.• 16:00 – End workshop
Competing in an alien world
• Adapting the business model to operate successfully against alien competitors, such as Apple
• Preventing the relegation of operators to ‘bit pipe’ status through applications ownership
What is the classic business model?
• Subscribers – increase numbers to increase revenue
• ARPU – increase data traffic by up selling smart phones with data plans
• Attract – lucrative business clients with targeted services
• Contract with device manufactures for premium phones with network specific features that improve stickiness and reduce churn.
• Carrier owns the customer relationship.
Why has Apple been so successful?
• COMPLETE CONTROL• NO FRAGMENTATION• APPLE OWNS THE CUSTOMER
RELATIONSHIP• EXCELLENT DESIGN
Apple has complete control
• One hardware platform• One OS platform• Developers must follow Apple’s method
to develop applications• One Application shop• One Billing method
Apple has no fragmentation
• Developers deal only with Apple. They do not deal with the wireless carrier.
• Developers deal with only one device specification.
• Developers deal with only one OS. • Customers must use iTunes.
APPLE OWNS THE CUSTOMER RELATIONSHIP
• The customer is bound to Apple. The investment after the sale is in Apple proprietary information.
• When Apple is no longer exclusive to ATT, I believe a large percentage of their customers will choose Apple over ATT.
EXCELLENT DESIGN
• You have to give it to Apple. They leveraged their user-friendly PC experience and moved it to the smart phone.
• The everyday consumer can and does download a large volume of stuff.
App Store Metrics• Count of Active Applications in the App Store [details]•
Total Active Apps (currently available for download): 264,519 Total Inactive Apps (no longer available for download): 52,603Total Apps Seen in US App Store: 317,122Number of Active Publishers in the US App Store: 53,249
Count of Application Submissions [details]•
This Month (Games): 1,408 ( 64 / day )This Month (Non-Games): 10,425 ( 474 / day ) This Month (Total): 11,833 ( 538 / day )
Application Approval Delay [details]•
August, 2010: Maximum delay 44 days, average delay 4.30 days.
Application Price Distribution [details]•
Current Average App Price: $2.85Current Average Game Price: $1.21Current Average Overall Price: $2.61
So who gets the Gold Mine and who gets the Shack?
• ATT network had issues handling the volume of data traffic in key markets:– Brand damage in large metropolitan areas– Initial network issues activating iPhones.
Gold Mine or Shack?
• When does ATT make money in the deal?– 2 year contracts– Data plans – no longer unlimited data
usage• ATT must increase the rate of investment in
their infrastructure to support data traffic generated from iPhone users.
Gold Mine or Shack• When the deal is over who gets the
customers?– ATT signs customers to two-year contract
and subsidizes the cost of the iPhone.– ATT also requires a data plan for iPhone.– Apple requires the iPhone user to install
iTunes to gain access to key functions of the iPhone.
– Apple requires credit card information to install iTunes.
Breakout activity• Three groups: 30 minutes
– Wireless Device Manufacturer– Wireless Carrier– Small Application Developer shop
• You will need a spokesperson for the group and a scribe.
• All decisions must be made within the group and by the group.
Topics of group discussion
• Key issues facing each company• What do the timelines look like for each
company?• What made you choose the OS direction• What impact did your decision have on brand?• Who owns the customer in each model?• What are the key risks associated with your
choices?
Wireless Device Manufacturer
• Medium size device manufacturer of cell phones.• Currently does not have a competitive product at the
smart phone level of device.• Need to decide on the features and function of their next
generation smart phone.• Decisions include:
– What OS will run the device, discuss reasons for picking this OS?
– What initial applications will be available on device?– What are the key features and functions this device will offer?– What trade offs need to be considered?
Wireless Carrier
• Medium size carrier with 5 million subscriber base.• You are losing subscribers to other larger carriers due to the
fact that their portfolio of devices is more attractive to business customers.
• Determine short term action plan to reduce the churn of lucrative business customers.– Include wireless devices you believe would compete against
iPhone.– Discuss how the carrier can take its brand to business customers
and prove out the value of a regional focused carrier?– Discuss your preferred Mobile OS?– Discuss the applications you would like developers to develop for
your new product offering?
Small Applications Developer Shop
• Wireless developer shop of around 50 FTE’s produce 3-4 applications a year. Your specialty is business applications.
• Your average costs per application developed is $350,000 USD. • The typical revenue share with carriers is 70/30. You get 70% and
the carrier gets 30%.• Determine the financial numbers required to make a 20% profit with
an average sale price of .99 cents on an apple store.• Determine the financials required to make a 20% profit with a
regional carrier offering targeted business applications for their customer base.
• Discuss what OS you would develop your next three applications on and why you chose that technology stack?
• Discuss your targeted sales channels.
Key Learning
• In order to compete with Apple, Carriers, Device Manufacturers and Application Developers you must partner!
Using applications to increase revenue
• Becoming an apps portal to maximize ARPU and differentiate brand.
• The importance of a quick time to market.
Control Issues
• Lack of coordination between device, applications and network.
• Infrastructure investments not synchronized with product release and application deployments.
• ATT does not have the customer relationship with the developers or consumers purchasing content.
Developer Portals of note
• https://developer.sprint.com/• http://www.nn4d.com/• http://developer.t-mobile.com/• http://www.orangepartner.com/• http://developer.sonyericsson.com/• http://www.forum.nokia.com/Developer_Programs/
Average Life of a Cell Phone
• I’m not sure that is the right question, but the life appears to be around 18 months. The cycle shortens as more technology is advanced to the device user.
• I think the real issue is how often do customers change mobile OS?
Developing the right apps for your market
• Targeting the consumer / enterprise segments: what do your customers want?
• Matching applications and VAS to your brand strategy.
Applications & Content
• Applications have been available for smart phones since their introduction six years ago:– Music & Videos big part of this evolution.– No one really captured the consumers until
Apple came along (so thanks Apple).
Catch-up Game for Carriers
• The mobile carriers need to educate their customers on applications and content available; make them easy to identify and locate; easy to purchase; and most importantly easy to use on the device of their choice!
Mobile Applications and Content
• It is estimated that by 2012 the application and content business will be worth 3.5 billion USD worldwide.
How do you get these applications and content
• It’s a very complex problem.• Different technology stacks;
fragmentation between carriers; device manufactures and those that want to steal your customers.
What happens when you send your customers to these shops
• Who will own the customer relationship?• Does it impact your brand?• What is the quality of the user experience?• Who will support problems with the
applications or content?• Who manages the application developer
when it comes to optimization of resources?
Technical support
Partner support
Conference activities
Evolving product offering
Marketing programs
Brand building
Acquisition DistributionSupportEducation
Developer Lifecycle
A developer program has a natural lifecycle. A program prospers when the right services and systems are applied to each phase of that lifecycle.
Acquisition DistributionSupportEducation
Developer Lifecycle: Acquisition
During the acquisition phase you need a specialized marketing team that knows how to reach out to the developer community with the right message.
Acquisition DistributionSupportEducation
Developer Lifecycle: Acquisition
Marketing team activities include:•conference activities such as workshops,
focus groups, and booth activities•targeted email campaigns•contests•developer days•partner outreach and CRM
Acquisition DistributionSupportEducation
Developer Lifecycle: Education
During the education phase, you need a specialized content team capable of educating the developer about your unique products and services - leading them through a clear process to begin the development process.
Acquisition DistributionSupportEducation
Developer Lifecycle: Education
Content team activities include:•website design and construction•technical writing•specialized content creation•video and flash production.
Acquisition DistributionSupportEducation
Developer Lifecycle: Support
During the support phase you need a specialized technical support team capable of helping your developer community solve problems arising during the development and testing processes.
Acquisition DistributionSupportEducation
Developer Lifecycle: Support
Technical support team activities include:•direct tier 1 support of the developer
community•FAQ and knowledge base content creation
and maintenance•Community/forum moderation activities•API creation and maintenance
Acquisition DistributionSupportEducation
Developer Lifecycle: Distribution
During the distribution phase you need a reliable distribution system capable of taking the newly developed applications and connecting them to the market (internal or external).
Acquisition DistributionSupportEducation
Developer Lifecycle: Distribution
Distribution tools and activities include:•application shop functionality integrated
into leading established marketplaces•secure, reliable enterprise distribution
mechanisms•accelerated paths to market with
established partners
Acquisition DistributionSupportEducation
Developer Lifecycle: Distribution
Marketing servicesContent servicesTechnical support services
The need for different personnel changes as your developer community goes through the natural lifecycle.
Collaborative Session
• Defining the high level work streams for a developer program
• From perspective of your morning breakout sessions
High Level Work StreamsNetwork
APIsTools and
SDKsContractual and Legal
Testing and Certification Web Portal
3rd Party Gateway
Technical Support
Partner Management
Phase 1
Phase 3
Phase 2
Key
KPI Consulting ConfidentialPhase 4
Break out session
• From the perspective of your company, determine the following:– Define the key work streams required for
an effective developer program.– Define the resource requirements to
support the ongoing operations of a developer program.
Using Managed Services to enable competition in the apps market
• Managing developers and apps without the internal support infrastructure.
• Assessing the competencies required from apps Managed Services vendors.
Internal Supporting Infrastructure
• Marketing (3) – Recruit Developers to the program– Developer Events: (Conferences, User conferences, Code
Camps)– Web Content Authoring, Forum moderation, Newsletter
production and Blogger– Technical Writer
• System Administrator/DBA (2)– Security Patches, Web administration
• Technical Support Personnel (2)– Mobile OS specific– Network trained
• Program Administrator (1)
Search
Security
User
CompanyRegistration
Community
Content
Tools
Down-loadables
OnlineContent
UserGenerated
Distribution
Admin-istration
CRM
Forums
SocialMedia
Chat
CampaignsSupporttools
Blogs WikiSystems
The right tools allow you to support your community effectively while continuing to communicate your message clearly.
Competencies Required
• Wireless Industry• Technologies used by wireless
developers• Brand management • Web Design • Global Developer Management • Event Management
End Workshop
• Contact Information:– Kenneth Plunk – CEO KPI
Consulting/DeveloperProgram.com– 2900 Jazz Street
• Round Rock, Texas 78664 USA– http://www.developerprogram.com/site/global/news_events/
articles/managed_services_conf/index.html
– Mobile: +1-512-413-9619– Office: +1-512-218-1001