The Next Steps to Accelerate the Tectonic Shift in Mobile, Part 2

Part 2: Usage scalability: How to reach billions of cell phone users beyond the millions of iPhone users

As described in a previous blogpost, we need

– Usage scalability

– Revenue scalability and

– Truly mobile services

to unlock the full potential of the mobile device for consumers and to turn cell phones into the massive interactive platform opportunity for developers that exists.

In other words, we need rapid growth of open platforms for usage growth; mobile advertising, virtual items and mobile payments for revenue growth; and creative thinking around new services that goes beyond the cell phone as an extension of online platforms.

These three factors combined, will unlock the full potential of the mobile device for consumers.

The good news is, each of the three factors can be driven to at least a significant extent by developers themselves.

Today, let’s talk about usage scalability.

The world has 3.3 billion cell phone users; the U.S. has 263 million subscribers, i.e. less than 10% of the world; and the most recent numbers showed about 12 million iPhone users globally, and maybe about 7 million in the U.S. (there maybe a few million more now).

What about all the others? The opportunity is tremendous, if we “unlock” it right. On a recent trip I took to some developing countries such as India, Nepal, Bhutan, South Africa and Brazil, I saw in daily life how cell phones are used as the no. 1 interactive platform globally, far above the use of the PC.

Take India. About 60 million people use online PC’s, less than 4 million have broadband access. But 300 million use a cell phone. Every month, 7-8 million new subscribers sign up. That’s 80-90 million new users per year. Up to 600 million more customers could be connected in India in the next few years, in a country of 1.1 billion (assuming a group of 200 million people that won’t be able to afford it). The majority of them use Nokia phones. The iPhone remains a luxury item.

And yet – the floodgates for “open mobile” have been opened by the iPhone. 300 million iPhone app downloads in under 150 days eliminate the old (and popular) discussions about whether or not mobile users really want to do anything else but talking and texting on cell phones.

Speed of open standards deployment and a few platforms to focus on. Now the next question is how fast the open standards will become more widespread, beyond the iPhone. How quickly will Google’s Android mobile operating system gain traction? The carriers’ biggest power still is in their decision making about which cell phones with which operating systems they sell and promote in their retail stores, which is where most consumers choose their device. In other words, how many Android phones will make it to the stores of the major carriers around the world and how quickly? And how quickly will Symbian (Nokia) phones be truly open? And when will all the other proprietary systems go away? The developer community needs 2-3 platforms they can focus their development efforts on – not 20.

Powerful browsers for low-end handsets. The next step needs to be the move from “smartphone apps” to “anyphone services.” Good browsers on low-end handsets will be a key to unlock the huge latent demand in developing nations around the world for mobile web services – given that online web services are hardly mainstream due to the lack of PC’s.  Handset makers may want to consider subsidizing powerful browsers in low-end handsets, and open revenues streams on the services side.  This is especially useful in developing countries where some handset makers hold large market shares, but carriers have less control in the market.

In one of the upcoming blog posts, we’ll cover revenue scalability.

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