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Betting on Mobile Innovations in 2011

Betting on Mobile Innovations in 2011

Dec 15, 2010

If you are a techie, chances are that you cannot escape the barrage of mobile products and daily news about new products hitting the consumer markets. Product launches, patent lawsuits, mergers and acquisitions, and new startup launches represent a diverse breadth of activities in this space.  But mobiles aren’t just impacting the techies of the world.  As soon as you explore emerging markets, you begin to hear about startup companies that are utilizing mobile technology to help improve the lives of those in impoverished regions. 

A case in point is M-Pesa, which has applied simple SMS messaging and money transfers to improve banking in countries like Kenya, Tanzania, and Afghanistan[1].  By enabling users to receive and send money, pay bills, and transfer money to others, M-Pesa is helping stimulate economic growth in these countries. Given the large range of what is considered mobile and the immense growth opportunities, entrepreneurship in this area is on the rise.  According to Crunchbase, technology start-ups categorized under “Mobile/Wireless” have risen year after year for the past three years[2]. One can be easily overwhelmed by the plethora of possibilities. In order to make sense of all the chatter, there are several key areas that are quite compelling for focused entrepreneurship in the mobile industry.

Software Development (Native Apps)

For a long time, it was difficult to generate substantial revenues by selling software for smart phones.  Since Windows Mobile and Palm’s Treo were first introduced, users have been able to install and pay for apps on their phones, ranging from games to mini-versions of Microsoft Office.  It was the invention of the app store that finally allowed developers to cash in with proper distribution channels and simplified payment system.  Now, new companies sprout weekly with either a single 'killer' app or a loaded portfolio of apps ranging from calculators to 3D adventure games.  The low start-up capital required to launch a product via the app stores attracts many entrepreneurs into the industry.

Examples
– Rovio: Maker of Angry Birds (http://www.rovio.com)
– Quickoffice (http://www.quickoffice.com)
– Glu Mobile: iPhone game maker (http://www.glu.com)

Mobile Services

There are lots of opportunities in text messaging and voice data streams that do not require installation of secondary applications or a smartphone platform.  The new mobile payment venture “ISIS”, which utilizes Near Field Communication (NFC) to turn your phone into a wallet indicates the major interest in the mobile payments arena.  Couple that with location based advertising and group text messaging, and you can see some of the interesting products that can be created with very simple technology.  Those already familiar or experienced with the Software as a Service (SaaS) model will follow the advantages and disadvantages of the entrepreneurship possibilities in this area.

Examples
– GroupMe: Group SMS Chatrooms (http://groupme.com)
– Google Voice (http://voice.google.com)
– Twitter through SMS (http://www.twitter.com)
– Remember To Watch: SMS based TV Reminder Service (http://remembertowatch.com/)

Emerging Markets

There is something fundamentally different about the problems that need to be solved in emerging markets and third world countries when compared to the US.  Phone to phone payment services are a high growth area in emerging markets, but only act as a starting point for the varied uses of mobile devices. Sproxil is currently using text messages to enable those in emerging markets to protect themselves against counterfeit products[3].  Their system allows companies to include a unique identification code that is verified using SMS to ensure authenticity.  Many emerging markets are skipping the landline and moving directly to mobile as the way to bring data and telephone service to their populations.  With mobile users in emerging markets estimated to account for two thirds of all mobile users by 2013[4], there is little doubt that this is a rapidly growing area with new and unique problems in need of solving.  Those looking to make big impacts in emerging markets are natural fits for this entry point into the mobile industry.

Examples
– Sproxil (http://www.sproxil.com)
– M-Pesa: Mobile money transfers (http://www.safaricom.co.ke/index.php?id=250)

Mobile Hardware

While it may lack the appeal of software and the immensely low capital costs, mobile hardware still provides the potential for high returns and growth potential as the need for more capable accessories, phones, and gadgets.  In particular, the bluetooth headset space has had several innovations.  Mogo Talk has designed a case and headset package for iPhones that removes the need to keep track of a separate headset in your pocket.  Maverick Inc. has created a speakerphone dock for use in cars. The speakerphone activates as soon as you magnetically clip your headset to it.  As consumers buy more gadgets, the need for an easy way to charge them all with one solution becomes a necessity.  Enter Powermat providing wireless charging for all of your devices.  There is thus a real need for physical hardware providing opportunities for established manufacturers and budding entrepreneurs. 

Examples
– Mogo Talk (http://mogotalk.com/)

The recent rise of the mobile phone closely resembles the way the personal computer ushered us into the information age.  Just as the PC enabled the creation of great solutions, a better way of life for many, and immense fortunes for a few, the mobile industry promises the same.

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[1]http://www.safaricom.co.ke/index.php?id=250

[2] http://www.crunchbase.com, using the advanced search for Mobile/Wireless companies

[3] http://www.sproxil.com/blog/?page_id=2

[4] http://www.itu.int/ITU-D/ict/newslog/Emerging+Markets+Mobile+Penetration+To+Rrise+From+46+In+2008+To+95+By+2013.aspx

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