Transcript Pre-Conference Workshop

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.
How has the business model
changed?
• Let’s talk Apple.
If there ever was one killer device
Apple iPhone seems to fit –
Source (Forbes)
SMART PHONES GENERATE
PROFITS
WHERE APPLE GOES OTHERS
FOLLOW
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): 52,603
Total Apps Seen in US App Store: 317,122
Number 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: $2.85
Current Average Game Price: $1.21
Current Average Overall Price: $2.61
The known issues with the
ATT/iPhone deal
We have a saying in Texas –
“She got the gold mine and I
got the shack”
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.
Three perspectives
• Wireless Carrier
• Wireless Device Manufacturer
• Wireless Developer Shop
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.
What Platform to Use?
•
•
•
•
•
•
S3
Meego
IOS
Android
Windows Phone 7
Blackberry OS 6
Key Learning
• In order to compete with Apple,
Carriers, Device Manufacturers and
Application Developers you must
partner!
Networking break and
refreshments
• 30 Minutes
Using applications to increase
revenue
• Becoming an apps portal to maximize
ARPU and differentiate brand.
• The importance of a quick time to
market.
WHY DID ATT NOT SEE THE
PROFIT MARGINS APPLE
EXPERIENCED?
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?
Lunch
• 1 hour
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.
Applications Shops
• GetJar, Cellmania, OVI, Google Market
Place, IStore
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?
Evolving product
offering
Partner support
Technical
support
Brand
building
Marketing
programs
Conference
activities
Developer Lifecycle
Acquisition
Education
Support
Distribution
A developer program has a natural lifecycle.
A program prospers when the right services
and systems are applied to each phase of
that lifecycle.
Developer Lifecycle: Acquisition
Acquisition
Education
Support
Distribution
During the acquisition phase you need a
specialized marketing team that knows how
to reach out to the developer community with
the right message.
Developer Lifecycle: Acquisition
Acquisition
Education
Support
Distribution
Marketing team activities include:
•conference activities such as workshops,
focus groups, and booth activities
•targeted email campaigns
•contests
•developer days
•partner outreach and CRM
Developer Lifecycle: Education
Acquisition
Education
Support
Distribution
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.
Developer Lifecycle: Education
Acquisition
Education
Support
Content team activities include:
•website design and construction
•technical writing
•specialized content creation
•video and flash production.
Distribution
Developer Lifecycle: Support
Acquisition
Education
Support
Distribution
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.
Developer Lifecycle: Support
Acquisition
Education
Support
Distribution
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
Developer Lifecycle: Distribution
Acquisition
Education
Support
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).
Developer Lifecycle: Distribution
Acquisition
Education
Support
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
Developer Lifecycle:
Marketing services
Distribution
Content services
Technical support services
Acquisition
Education
Support
Distribution
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 Streams
Network
APIs
Tools and
SDKs
Contractual
and Legal
Testing and
Certification
Web Portal
3rd Party
Gateway
Technical
Support
Partner
Management
Key
Phase 1
Phase 2
Phase 3
Phase 4
KPI Consulting Confidential
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.
Networking break and
refreshments
• 30 minutes
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)
Systems
Social
Media
Blogs
Forums
Community
Wiki
Chat
User
Generate
d
Security
User
Registration
Content
Company
Search
CRM
Tools
Campaigns
Downloadables
Distribution
Administration
Online
Content
Support
tools
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/a
rticles/managed_services_conf/index.html
– Mobile: +1-512-413-9619
– Office: +1-512-218-1001