Google, a mobile platform maker (of Android), starts to de-emphasize carrier-based NFC. As per IDC’s report (Aug 2013), Android accounts for 79% of the Smartphone shipments as on 2Q2013. iOS (through iPhones) accounts for another 13% of the Smartphone shipments.
If Google manages to establish the Host-Card-Emulation standard as an alternative to the secure-element(SE) based NFC transactions, SE-makers have a steep climb ahead to compensate for lost revenue from SE sales. Read more about Google’s move.
Not so long ago, I did an assessment for enterprise printer makers on this blog and had proposed a product strategy to map innovation cycles between printers and contact-less technologies. Happy to see it was in line with what dominant printer makers are thinking.
“A newly published patent application shows that Apple has been working on ways to combine the fingerprint verification technology it acquired in July 2012 with NFC — and may also be eyeing a variation of NFC that uses “body coupled communications”
An interesting read about the worlds of Product Owners & Product Managers on Pragmatic Marketing. The article has quite an interesting start, read on to find more…
The Mythical Product Owner
Product Managers must quickly adapt to the Agile methodology, or face becoming sidelined. It is critical to understand the relationship between traditional and new roles within a delivery organization, particularly between the Product Manager and the Product Owner.
Barbara Nelson said in The Politics of Agile, “When product managers weren’t looking, the developers went agile.” Indeed, many Product Managers were taken by surprise at the speed of Agile’s adoption. And with the introduction of a new Product Owner role and its perceived overlap with the traditional Product Manager function, Product Managers have expressed some anxiety about the future of their role.
More wireless charging solutions for mobile phone! So how will this impact adjacent industries?
Imagine mobile-phone based applications that swiftly eat through the mobile phone battery-life. For instance mobile apps/services based on multimedia ( like – video playback, video-on-demand, camera apps), location-based-services (read – GPS & internet services), augmented reality services etc.
Such solution providers must look at partnering with wireless charging eco-system providers. Wouldn’t wireless charging enable consumers recharge their phone-batteries & reduce adoption barriers for the said application categories?
In an attempt to better understand and apply the blue-ocean strategy, I decided to test the framework on a rapidly evolving market – the payment’s industry.
The solutions in the payments industry can be broadly classified into categories: those addressing emerging economies and those addressing developed economies. It naturally follows that the value propositions of the payments solutions in these two segments are quite apart and hence the associated value networks differ as well.
Here, I take a look at the developed economy market and specifically into a trend that has attracted several firms – mobile point of sale (mPOS).
In its simplest form, mPOS can be described as a payment-terminal (like the traditional credit card terminal) on your phone! Well it literally is that – pay using a mobile device (Smartphone/Tablet) and use funds from the traditional card accounts (magnetic stripe cards and the chip & pin EMV cards). Vendors like SumUp and Square Inc. are good examples.
The surge of companies in this space indicate a rapidly evolving technology area wherein there is yet to be a dominant technology. But it has seen innovative business models and new value propositions.
The key elements of the traditional credit card terminal used at retail outlets have the following characteristics:
Value to customer
A significant fixed cost is involved to procure such a device (Anything between $150 to $1000 per terminal depending on product specifications)
Enrollment processing time
This involves enrolling with payment solution providers and fulfilling a barrage of legal requirements to get the process started.
Pricing structure complexity
In addition to an initial fixed cost, there are monthly maintenance charges that could be accompanied with long term agreement charges and other complex pricing structure.
The high fixed cost and complex pricing structure necessitate a certain number of transactions to break even.
End users that swipe their cards through these terminals feel secure due to pin-entry provision.
It follows that both front-end and back-end systems must complement to avoid fraudster from abusing the payment systems.
CRM software and other middleware solutions can enable merchants to pull out relevant sales information transacted through the payment terminal
The value curve for the traditional credit-card terminal industry would look as below:
Vendors likes SumUp and Square Inc. have however reversed this curve, and brought to the fore the mPOS dongle that extends the ubiquitous Smartphone (& tablet) into a payment terminal. Taking advantage of the app-store eco-system it provides merchants with a basic application for usage and also allows merchants to create customized apps to exploit the backend services. Merchants can take this a step ahead to analyze the sales data & customer preferences and thus derive business intelligence. All this comes at zero additional charges – the dongle comes for free – and in short turnaround time.
The grid below indicates the application of the Four-Action Framework (ERRC) – depicting a change in priorities of the key elements identified before, in addition to additional elements provided by the new offering.
Eliminating the high fixed investment and cutting down the enrolment process drastically, these vendors have been able to attract a new customer segment – micro-merchants – those that traditionally stayed away from the card-terminal and primarily dealt in cash.
mPOS vendors maintain a simple revenue model – charging a fixed percentage of sales revenue (typically 2.75% as of today). mPOS thus met the unmet need of a previously ignored segment of customer. An analogy I can think of here is text-based mobile banking (like M-PESA) in emerging economies – it met the banking needs of the un-banked customers in such geographies.
The value curve of the mPOS solution is overlay-ed on the previous chart as shown below:
Clearly mPOS is an interesting proposition for the payments industry. While the use of this ‘cool’ gadget may sync with the brand image of some merchants, there is need for caution. mPOS vendors must seek to address concerns, if any, of consumers reluctant to type in their PINS into a merchant’s phone or tablet!