Telematics Update's Jan Stojaspal reports from The Open Mobile Summit London 2014 on smartphone innovation, the future of wearables, the impact of mobile on video content and advances in smart home technologies in Europe.
It was not called “throw your phone at the wall app,” but the idea came close to it.
A sponsor of county cricket in the United Kingdom wanted to use mobile to highlight his association with this quintessentially British sport, and one idea to come out of a creative meeting at an unnamed advertising agency was to produce a game that would allow players to use their accelerometer-equipped smartphones to simulate pitching a cricket ball, said James Shepherd, director of mobile at OgilvyOne UK, during a keynote on the morning of day one of The Open Mobile Summit London 2014.
“I don’t know if you agree with me or not, but I particularly think it’s a very daft concept,” he said. “It immediately brought to mind when Nintedo Wii was released and there were lots of stories of controllers flying out of people’s hands when they were playing Wii tennis and smashing plasma screens. And all I could think about when this idea was presented was this client having loads of people phoning him up, saying, ‘I downloaded your game, and I threw my phone at the wall at 50 miles an hour trying to win tickets to the cricket.”
The idea was scratched, but to Shepherd, it illustrated a larger problem: the fact that “mobile is still treated as gimmicky, as an adjunct, rather than [being] integrated,” Shepherd said. “It’s a fundamental flaw in how we treat mobile when we look for [the] cool or quirky and utilizing a functionality in the phone just because it’s there, rather than delivering something that satisfies a customer need.”
Shepherd’s comments referred to the advertising business. But they also fit a broader theme that emerged during day one of what is the 11th biannual event dedicated to a high-level exploration of the many different ways mobile disrupts the world we live in. While mobile is recognized as a technology poised to transform everything from advertising and electronic payments to how media is consumed and how we manage our homes, it has a long way to go before it becomes a seamless and frictionless experience, where the underlying technology is almost incidental rather than calling attention to itself.
The path to seamless and frictionless mobile
Part of the problem is that “mobile is the classic moving target,” Shepherd said. “There are constantly new evolutions in technology, in behavior, and how we use the channel.” But that should not stop those implementing mobile strategies from trying to improve on the overall experience, be it by small increments, as even those can add up to a substantial difference over time, he added.
One such small improvement is, for example, showing a keyboard with the “@” sign when a mobile app asks for the user’s e-mail address. “I believe mobile will only truly become the channel we all know it can and should be if it’s properly baked into everything we do along that customer journey, so not as an adjunct, not as an afterthought and not siloed,” Shepherd said.
Hany A. Fam, MasterCard's president for global strategic alliances, seconded Shepherd. In more than one way, the time of mobile payments has already come in Europe, he said. For example, 27% of all U.K. online sales last Christmas came from mobile devices. “We are crossing that line between interest, intent and action, and I think that’s important,” he said.
But that does not mean that the experience is satisfactory. “From a wallet’s perspective, consumers are looking for interoperability and simplicity,” he said during a discussion called “Mobile payments: Wallet in the Cloud or pie in the sky?” “They are being bombarded and have been bombarded with many solutions in the market that are purporting and assuming to know what they want best and what they need best, but the reality is they want simplicity and interoperability, and, frankly, they don’t want to see how the sausage is made behind the scenes,” he said.
Addressing friction on mobile is “exponentially more important than in the physical world,” Fam added. “In the mobile world, unlike the physical world, a bad experience or a difficult experience literally could mean the end of that app, literally could mean the end of that relationship for the consumer.”
Some sources of friction are universal, according to Fam, such as the fact that there are four false positives for every five transactions – whether card or mobile – that financial institutions end up declining because they get confused about things like the client’s location. Others are distinctly European, and they include the fact when people travel in Europe, 94% of them don’t use the data services on their phones due to high roaming charges.
“What are we talking about here, guys?” Han asked. “We are talking about great apps, great targeting of consumers, etc. The reality is that 94% of people have got their channel closed when they are traveling. And when they are home, they are thinking really hard about when they are hitting their data caps and how to minimize or maximize that.”
Among other mobile trends discussed on day one of the May 19-20 Open Mobile Media conference were smartphone innovation, the future of wearables, the idea of open access, the impact of mobile on video content consumption and advances in smart home technologies in Europe.
(For more on MasterCard and mobile commerce, see Q&A: MasterCard and the building blocks for mobile commerce. For Europe’s plans to abolish roaming charges, see Fed up with roaming charges? So is the E.U.)
The smartphone has no differentiation left
The day opened with Richard Kramer, managing director of Arete, an equity research company specializing in global tech, telecoms and alternative energy sectors, who said that smartphone hardware innovation has run its course in the developed world. According to him, today’s consumers see the equivalent of Andy Warhol’s soup cans when they walk into a mobile phone retailer. “There is no differentiation left,” he said. “It used to be that you had all these crazy shapes and form factors in mobile devices. Since 2012, we have all been looking at the same flat, black slab.”
What’s more, smartphone penetration levels in places like the United Kingdom leave little room for additional growth. “We are not just saturated; we are soaked,” Kramer said. “We are in the after-hardware era in technology. Hardware is now table stakes.” That said, there is still a great deal of opportunity in emerging markets, particularly when it comes to lower-cost smartphones that retail for around $100. “This is where the battle for the next big audiences are being fought,” he said.
Wearables: Slow on the uptake
When it comes to wearables, Kramer said he was skeptical as to their potential to receive widespread adoption quickly, adding that they were going to require “a lot of behavior change, if not policy change.” “Most of these companies that are doing wearables right now … are looking to get bought before they become an app or a feature on someone else’s device,” he said.
When will adoption take off? “Simple,” he said. “When Blue Cross, Blue Shield or Kaiser Permanente or Standard Life says, ‘You will wear this fitness-tracking device or health-tracking device, or we will charge you 20% more for your premium.’ And when is Google Glass going to take off? When G4S or Securitas, who have a million people walking around campuses and buildings all night, say, ‘Let’s put these things on people and turn them into walking security cameras.’”
A late morning panel on the future of wearables agreed with Kramer on wearables being a niche product for the moment. When asked what was working in wearables today, Mark Curtis, chief client officer at Fjord, a service design firm, said: “I think the short answer to that is: Compared to where we are with smartphones, for example, not a lot. It’s still incredibly early days, and we need to recognize that.”
But the panelists were far more upbeat when it came to discussing the future. According to Curtis, Google Glass is pointing in the right direction. “They have done some very clever things there,” he said. “One of the things they have done is they thought about the bandwidth of the human body, and they realized that the quickest way to get rich information into the human body is through the eyes and the quickest way to get it out is through the mouth, and, therefore, they designed something around that, which I thought was a stroke of genius.”
Adoption of wearables was going to be led by digital health and digital healthcare, the panelists agreed, if for no other reason, then because the value of using wearables to manage chronic conditions, such as diabetes, was well established.
(For more on mobile health, see Bumps on the road to mHealth in the connected car.)
“What is going to be challenging over the long term is [defining] the value that the end user receives over the overhead of having to remember another device, having to charge it, put it on, etc.” said Miles Kirby, managing director, Europe, Qualcomm Ventures. “I think that enduring value is something people are still working through.”
Transparency about data collected by wearables was singled out as another challenge, particularly when it comes to establishing the line between cool and useful versus creepy and intrusive ways of using the data.
Finally, there are a number of “deep design challenges” to be addressed, including how to keep people engaged with the device long-term and how to factor in the context the device is used in, Curtis said.
“RunKeeper, not a wearable, but effectively a competitor of a wearable on my phone, insists on sending me alerts once a week, saying, “This time a week ago, you thought it was a good idea to go for a run,” Curtis explained. “It’s really cool if you are not working. But if I went for a run on Wednesday in the middle of the day because I was working from home, a week later I am in Istanbul in hot, stuffy meeting, wishing I could go for a run but completely incapable of doing so,” he said. In such a circumstance, a reminder from RunKeeper begins to be more of an “aggravation rather than help.”
Open mobile: Is there such a thing?
On the idea of openness in mobile, Kramer cautioned against taking the efforts of the likes of Amazon, Google or Facebook as anything other attempts to control the space. “Open in this industry is a four-letter word,” he said. “None of these companies in the digital ecosystem want anything open. My analogy for this is fishing rights. The Amazons, the Apples, the Microsofts, the Googles of the world, they want to create giant dragnets in their fishing waters that hoover up every bit of digital metadata, plankton, krill, whatever you have in the ocean. … These are the vampire squids of the web.”
He said that Google-Samsung, Apple and China have already established themselves as “digital empires” while Microsoft, Amazon and Facebook were vying to become ones. But that does not mean they cannot be challenged, particularly when it comes to innovation, he said. “All of these empires in their own way are deeply dysfunctional,” he said. “Microsoft spent $9 billion last year on R&D, [yet] it doesn’t make them an innovative company.”
He went on: “If iCloud was really a great service, Dropbox wouldn’t exist. If iTunes was a great streaming service, why does Spotify have the user base that it does? And you can say that in messaging, in productivity, in content aggregation, in photo sharing, payments, etc. So all these empires may say, ‘Hey, we can colonize everything,’ but they are not best of breed in those respects.”
Video on mobile makes an impact
When it came to considering areas where mobile is having a particularly large impact, media access came up time and again.
According to Daniel Heaf, BBC’s chief digital officer responsible for driving a unified digital strategy and consumer vision across BBC Worldwide's digital portfolio, more than 50% of visits to bbc.com already come from mobile devices. And while digital video has been slow to take off, it will be a “massive category,” reaching between a quarter to a third of page views in terms of the total size of the news audience by 2016, he said.
This massive shift from broadcast to IP will have profound implications for the medium, Heaf predicted. One is it will speed up a shift from linear viewing to on-demand. Another is that the growing availability of on-demand content will mean that one will need less of it. “There will not be huge schedules to fill,” he said. “So the economics of content creation will have to change. If you can’t miss anything ever, why would you need so much of it being produced all the time?”
According to Heaf, there will also be changes to how the content is structured. For example, there will be a move from channels to apps, but “apps will be more like channels,” he said. “Launching an app, choosing what to watch, that’s already way too much work for most people.”
What’s more, “premium-quality content will capture most of the growth in value because it will stand out in a world where nothing can be missed and viewing time is finite,” he said. But “the only people who are going to [succeed] in the premium space are the people who can afford to commercialize multiple international audiences,” he added.
Connected home, connected car
A mid-afternoon panel discussion called "Smart home: From vision to reality” was noteworthy for several reasons.
Bringing together Colin Calder, founder and CEO of PassivSystems, Tom Guy, product & commercial director at British Gas, and Marco A Romero, global head product marketing M2M, Telefónica, it showed the smart home to be more than just another revenue stream for Telefónica, with Romero calling it his company’s “fifth play” at a time when wireless carriers were increasingly forced to play the role of a dumb data pipe.
Calder said smart homes were “a long way off” from becoming a mass market but saw a great deal of opportunity, saying that the home improvement market in the United Kingdom alone was worth £27 billion a year.
Guy, for his part, said “quality competition” was needed to help develop the market. According to him, sales of the British Gas Hive smart thermostat were going “extremely well,” with around 80,000 systems already sold and around half of the customers using the thermostat every other day. “There is a couple of things that we have learnt,” he said. “One is absolute simplicity in design; The majority of people interact with our system through mobile." The other is the need to show value either through energy savings or giving control back to the consumer.
(For more on this, see Connected car, connected home.)
Jan Stojaspal is the executive editor at Open Mobile Media and Telematics Udpate.
For all the latest telematics trends, check out Telematics India and South Asia 2014 on May 28-29 in Bangalore, India, Insurance Telematics Canada 2014 on May 28-29 in Toronto, Telematics Update Awards 2014 on June 3 in Novi, Michigan, Telematics Detroit 2014 on June 4-5 in Novi, Michigan, Advanced Automotive Safety USA 2014 on July 8-9 in Novi, Michigan, Insurance Telematics USA 2014 on Sept. 3-4 in Chicago, Telematics Japan 2014 in October in Tokyo and Telematics Munich 2014 on Nov. 10-11 in Munich, Germany.
For exclusive telematics business analysis and insight, check out TU’s reports: Insurance Telematics Report 2014, Connected Fleet Report 2014, The Automotive HMI Report 2013 and Telematics Connectivity Strategies Report 2013.