Comparison of Business models

CIS 8401 - Mobile Commerce and Applications

Franz Altmann

Outline

Busidess model Definition Regional and Cultural Differences Business Models in Europe Business Models in South Korea

Definition

A business model is the abstract description of a business.

It consists of mobile services and technologies, core expertise and strategies of multiple players, and, revenue generation and sharing.

“how to make money”

Regional and Cultural Differences

Use of mobile services varies amoung countries/regions, due to:Different penetration rates of fixed internetIn Europe SMS-Services reduce the demand for

other sufisticated applications & servicesDifferent affinity for Gadgets,…Different relations amoung Device manufactorers,

wireless carriers and content providers…

Partner- & Relationships in different countries/regioins

Carriers and manufactorersAsia: Central role of carriersEurope: Carriers are ‚passive‘ technology

receiver Carriers and content providers

Asia: working close togetherEurope: carriers do it themselves or provide

a channel for content providers

Services in Europe

Example T-Mobile in Germanyvoice and now also 3G Video callsMobile TVMobile InternetNavigation ($1.35 p.R.)E-MailSMSMMS

Short Messaging

Standard SMSTariffs cover the cost of sending the SMS

within the operator network of the sender and the interconnection fees on the other operator networks

Premium SMSContent/service provider receives a

proportion of the revenue paid by the user to the network operator

SMS Applications

Information Alerts Travel updates, news alerts, stock alerts,...

Customization Services Logos & screen savers, ringtones & music, ...

Communities Personal chat, dating, private consulting,…

Entertainment Quiz & games, SMS voting, jokes & cartoons,.

Mobile Marketing Direct marketing, special promotions, ...

M-Commerce tickets, online purchases, pay-per-view web-content,...

Business Models in Europe I

Classical Model 1 Classical Model 2

Business Models in Europe II

„new“ business model

Pricing at T-MobileTariff Max Relax100 Basix E-Mail

(opt.)

Monthly price $60 $38 $13 $5.4

Inclusive minutes

Unlimited, calls to different mobile nets $.4 per m.

100 -- --

Price per minute over limit

-- $.53 in all nets Between $.12 and $.8 depending on net and time

--

Messaging Sms: $.26 in different nets, $.53 per MMS

Sms: $.26 in different nets, $.53 per MMS

Sms: $.26 in different nets, $.53 per MMS

--

Revenues and Pricing

There are often multidimensional tariffs in mobile communications.

Business Model in South Korea

Carrier centric like DoCoMo‘s i-Mode Very rich content with exclusivity agreement

with pop stars and with TV channels. Shorter films versions and Director‘s cut versions

Instead of charging monthly subscription prices in addition to per data packet transmitted as in Japan, Korean operators only charge per data packet transmitted.

No subsidized devices

Services

1 Chatting/Meeting/Broadcasting

3 Game/Download Contents

4 Music/Picture/Photo

5 Sports/Fortune/Cartoon

6 Location/Traffic/Travel

7 News/Study/Life/Shopping

2 Stocks/Lottery/Finance

8 Adult Club

NATE-Basic

( Menu OK Back )

Personal Information Mgmt.,

WEB Mail Link, Personalized

Menu automatically shown by

User’s frequent hits

Mobile Chatting, Dating Service,

Card, Messaging, Entertainment

Info., NATE Air

Stocks Quotes & Trading,

Banking, Asset Management,

Loan, Insurance, Mobile Intranet

Various kinds of games,

VM (Virtual Machine) based

Download Contents Group

Character download, Ring tone

download, Karaoke, Photo Mail,

Photo Meeting

Sports News Flash, MLB/KLB,

Soccer, Horse racing, Humor,

Cartoon, Fortune-telling Service

Discovery of One’s whereabouts.

Traffic Condition, Area Info.

News Group, Weather, E-book,

Dictionaries, English, Recruiting

Info. Coupon, Ticket Purchasing,

Ladies’ menu, Lottery

Contents Assortment only for

Adults

Information Retrieval,

Promotion SiteMy home, Mail Search, Event

Popular Mobile Internet Contents (multiple choice)

96.8%45.4%

42.1%37.1%

20.6%19.9%

13.9%11.5%

7.6%6.4%

5.5%4.8%

4.8%3.4%

3.0%

0% 20% 40% 60% 80% 100% 120%

Ring tone/Melody

Music

Picture download/transmission

Game

E-mail

Information search

Weather info

Moving Image

LBS

Mobile banking

Telematics

Chatting/Community

Shopping/Reservation

Stock/Investment

Education/e-Book

Pricing of mobile Internet The most popular payment system for the wireless

internet use is ‘time-based charge’ system (41%), followed by ‘access-based charge’, ‘fixed charge’, and ‘data packet-based charge’ with 20.4%, 19.9%, and 17.1% respectively.

9.9%

2.6%

47.1%

23.7%

16.6%

5.8%

37.0%

25.9%22.7%

8.5%

1.7%

41.0%

19.9% 20.4%17.1%

Time-based Fixed Access-based Data packet-based Others

2002. 9 2003. 6 2004. 9

Questions?!?