Mobile Contactless Payments Gain Momentum

October 28, 2008

Next week the 2008 CARTES & IDentification conference kicks off in Paris, France. CARTES is the world leading show for banking technologies & eTransactions & this year they are giving special attention to mobile & contactless payment solutions. This year’s event should be quite exciting for all involved given the high number of mobile & contactless payment solutions that have deployed in many countries & that went into prototype here in the United States.

We’ve been following the contactless payment industry for almost two years now & we continue to see an abundance of new contactless solutions develop. Combine contactless solutions to what has emerged in the mobile space these past 18-months with the introduction of smart phones such as Apple’s iPhone & I can assure you that contactless mobile solutions are closer in sight than many predicted.

Just last month, Juniper Research published a study titled, “Mobile Payment Markets: Contactless NFC 2008-2013”. Key points from this report include:

– By 2013, the global mobile subscribers with NFC phones will reach 700 million
– FeliCa-enabled phones riding on Japan’s NTT DoCoMo, KDDI, & SoftBank’s network dominate this market. Juniper estimates that roughly 50 million FeliCa NFC enabled phones have shipped to date.
– Juniper predicts that North America, Western Europe, & the Far East & China will be the dominate regions by 2013.

This Juniper study also reiterated some of my own concerns about the roadblocks that currently exist in this Near Field Communications (NFC) mobile market. The first & most obvious concern stated by Juniper was the lack of NFC phones on the market. The report also pointed to the lack of NFC readers installed at merchant locations as the second roadblock. An additional concern that I have is that consumers & merchants have yet to be properly educated on how NFC works. I dialogue with a number of smart & tech savvy people each day & I’ve realized that NFC is still an unknown technology. To my surprise, some of the people I dialogue with aren’t even familiar with the term NFC.

Hence the reason I am so delighted when I read reports that indicate that NFC trials here in the U.S. continue to show progress. One of the best examples & one that got a lot of attention was the NFC trial conducted with riders of the Bay Area Rapid Transit District (BART) in San Francisco. For four months (January 28 – May 30, 2008), BART riders were provided NFC equipped phones to pay for their transportation costs. These same NFC enabled phones allowed participants taking part in the trial to make payments at participating Jack in the Box restaurants & to download directions from NFC enabled posters inside BART terminals. Full results from the NFC trial with BART can be viewed in this Yahoo Finance article.

As more NFC trials are conducted here in the U.S., NFC will gain adoption by consumers. Retailers are already beginning to acknowledge the benefits associated with NFC payments & are favoring them over traditional Point of Sale (POS) swipe solutions.

I suspect as next week’s CARTES & IDentification show gets underway, we will see a growing number of devices & articles pointing to the market that exists for contactless mobile payment solutions.

Brian Kirk
VP Business Development
NetworkIP & Jaduka


Mobile Phones offer More Than Just Voice

October 15, 2008

Almost every day someone presents a new idea or use for mobile phones. The size of the mobile market has become so vast that it is increasingly more difficult to identify those mobile business ideas that will work & those that won’t. In the last 12 months the mobile space has opened up new business verticals that few would have ever imagined.

The mobile space is still relatively young. It was only 25 years ago (October 13, 1983) yesterday that Bob Barnett, President of Ameritech Mobile Communications (what is now AT&T Inc. & Verizon Wireless), made the nation’s first commercial cell phone connection from Chicago’s Soldier Field.

When Barnett made that first commercial cell phone connection he used a Motorola DynaTAC handset that weighed 2 1/2 pounds & retailed for $3,995 USD. Fast forward to 2008 when most mobile phones weigh less than 1/2 a pound, they retail for around $50 USD, & even the most basic mobile phones offer address books, calendars, games, text messaging, music players, & cameras.

Just three weeks ago I read an article in the Canadian Press describing how a new Japanese mobile phone built by Sharp Corp. will be used in place of a traditional car key. This new phone uses a technology developed by Nissan Motor Co. called “Intelligent Key”. As reported by the Canadian Press, “Cars equipped with the system sense when the correct key is nearby, automatically unlocking their car doors, and allow the engine to be started once the key is brought inside the car. Nissan said it has shipped about a million cars with the technology in Japan since 2002.” NTT DoCoMo Inc., Japan’s largest mobile operator, will provide the mobile network that this new service will run on.

It isn’t a surprise to me that a Japanese company is the first to introduce this type of technology. The mobile phones available in Japan are some of the most sophisticated in the world. Most of the mobile phones you will find in Japan come standard with digital TV, music players, Global Positioning Service (GPS), & cameras that double as barcode scanners & wireless credit cards.

The mobile phone is no longer a device for business men & women or the elite. The mobile phone has become a ubiquitous device for all income levels & demographics around the world.

Today, the mobile industry is nearly a $150-billion-a-year industry. As data speeds continue to increase & mCommerce solutions gain popularity the mobile industry will only continue to grow.

Brian Kirk
VP Business Development
NetworkIP & Jaduka


G1 Android Already Sold Out

October 7, 2008

Two weeks ago today (September 23, 2008) Google officially announced & showed off the new HTC G1, aka the “Google Phone.” The G1 will run Google’s much anticipated Android mobile operating system & T-Mobile will provide service on their GSM network.

In my opinion, the G1 will be this first real competitor of Apple’s iPhone. One week following Google’s announcement & before the first phone had even shipped, T-Mobile announced that they had sold out of the G1. The demand for the G1 has far exceeded both Google’s & T-Mobile’s expectations. In an effort to respond to consumer demand, T-Mobile decided last week to triple the number of G1 mobile devices available for sale through pre-orders until October 22nd.

The excitement surrounding the release of the G1 Android goes beyond the fact that T-Mobile has sold out of their initial inventory. This is excitement can be seen through the numerous developments & announcements surrounding Android to include: Visa developing a mobile payment solution on Android, T-Mobile removing their 1GB data cap, & Amazon preloading their MP3 digital music store on the G1.

The future potential of Google’s Android operating system is almost limitless. HTC is predicting up to 2 million Android phones will be sold by end of 2009. Google is also making waves with mobile carriers with their hopes to free the mobile device from the mobile carrier with a concept they call “Instant Bid.” Expectations remain high & I like many others believe that Google will deliver & expose the necessary technologies for others to develop the next generation of mobile solutions.

Brian Kirk
VP Business Development
NetworkIP & Jaduka


Apple Shifts the Mobile Industry

September 23, 2008

I was reviewing my notes from last week’s Mobilize conference & I found myself asking where was Apple? This 1-day conference featured eight panel discussions with talent from the major mobile network providers, the mobile device manufactures, the mobile operating systems, & a variety of companies that specialized in mobile application development & marketing. The panel discussions consisted of topics ranging from the development of mobile applications with Location Based Services (LBS), to the hurdles associated with mobile carriers, to investment strategies in the mobile market space. Regardless of panel topic, I noted a recurring theme throughout. Not one panel discussion could avoid bringing up Apple & what they had done with the iPhone. It felt at times like the entire conference consisted of people asking how do we keep up with Apple, or is Apple’s approach the right approach to take, or what will Apple do next?

I scanned the list of conference attendees that was handed out at the beginning of the conference & there wasn’t a single person in attendance from Apple; nor was anyone from Apple participating in any of the panel discussions or keynote presentations given that day.

So here I sat in a room full of very talented people from some very reputable & large companies who could not help but analyze Apple & what Apple has done to the mobile market.

I find myself asking why Apple would have been there. Apple has set the standard. They’ve raised the bar with mobile devices & mobile application development & distribution. As a result, we find ourselves trying to catch up to Apple. While we sit here discussing how Apple approached the mobile market, they continue to innovate. I’m sure from time to time that they find themselves at conferences looking for answers to questions & to get a feel for a market. Of course they appear to do their own research in many other ways. Apple doesn’t wait for an industry to shift, they shift an industry.

Can other mobile device manufactures & mobile operating systems surpass Apple? Is today’s release of Google’s Android operating system on HTC’s G1 an example of this or will Apple continue to shape the mobile industry?

Brian Kirk
VP Business Development
NetworkIP & Jaduka


The Economics of Mobile Application Development

September 22, 2008

At last Thursday’s Mobilize conference the discussion started off with a round table focusing on “The Economics of (Mobile Application) Development.” At the end of this panel discussion which included talent from BlackBerry, the LiMo Foundation, Qualcomm, Adobe, & Windows Mobile the group concluded the following:

“That mobile applications will run primarily over the web versus being installed native to the device, applications will be available in a centralized area (like Apple’s App Store) versus a distributed model of distribution, most applications will be downloaded versus bundled with the device, mobile applications will be developed through businesses rather than through a consortium, & finally that applications will continue to be geared towards the consumer versus businesses.”

These predictions point to a couple of hurdles that in my opinion will continue to plague the mobile industry for many years to come.

The first hurdle is that there are far too many mobile operating systems & too few standards in this space. When a company or an application developer decides to develop a mobile application they are forced in most cases to pick a single operating system to use to develop their application because trying to keep up with the support & life-cycle of that application on 5+ mobile operating systems requires resources that many businesses & application developers simply don’t have to invest. As a result, businesses & application developers loose entire audiences because their application won’t be supported on a large majority of mobile devices running other mobile operating systems. Even with 5+ mobile operating systems; why can’t each mobile operating system adhere to some set of standards that would allow applications to seamlessly work across operating systems?

It is evident that device manufactures realize the control they’ll have when choosing a particular operating systems to run on their device. That is why there is such a race to gain market share now before the mobile market becomes even more saturated with additional mobile operating systems (note that Android from Google is being released this week). If these companies can’t work together on a set of standards for businesses & application developers to adhere to my hope is that we’ll see some device manufactures & mobile operating systems simply go away.

Secondly, mobile carriers still control too much of the equation. The mobile carriers have control of which devices they’ll allow on their network. They determine how the mobile applications will be distributed to the consumer; installed on the device prior to sale or forcing the consumer to download. The mobile carriers also control the costs associated with the network time (voice or data) that the application will require to use. All of these control factors make it very difficult for businesses & application developers to develop an application that is simple & affordable for the consumer to use.

While the mobile market is obviously exploding & “open” for growth, don’t be fooled to believe that there aren’t some significant hurdles for us to overcome in order to deliver a valuable solution to enterprises & consumers.

What is your opinion on these questions pertaining to the mobile market?

Applications will run: Native or Web?
Applications will be distributed: Centralized or Distributed?
Applications will be installed: Downloaded or Bundled?
Applications will be developed by: Businesses or Consortium?
Applications will be geared towards: Consumers or Businesses?

Brian Kirk
VP Business Development
NetworkIP & Jaduka


NetworkIP & Jaduka Attending Mobilize 2008

September 18, 2008

Early this morning Trevor Baca, VP of Software Engineering, Karthik Srinivasan, Director of Systems Engineering, & I jumped on planes headed for San Francisco to attend tomorrow’s Mobilize conference. This is the inaugural year for the Mobilize conference & with GigaOM behind this one it is sure to be a success & last for many years to come. This is an exciting time to be in the mobile space & we expect tomorrow’s conference will be just as stimulating & productive as it promotes to be.

The conference has pulled together thought leaders from Google, Nortel, Cisco, Motorolla, Sprint & many others involved in the mobile industry to cover topics that we’ve all been asking & that will enable us all to make informed decisions in this new market. The Mobilize conference also includes a launch pad session so companies like Cumulux, Fonemesh, Fonolo, Fusion Garage, Heysan, LuckyCal, MotionDSP, Pinch Media, placethings, Skyfire Labs, TuneWiki & Zecter can present their new mobile products.

Over the past few months we’ve been talking about how faster mobile data speeds (3G, 4G, & LTE) & open mobile operating systems (Apple, Symbian, & Google’s Android) are making this an exciting & opportunistic market for businesses & application engineers to develop new & innovative applications for the mobile space. As more companies & application engineers enter this space & find themselves supporting mobile consumers & mobile products they are realizing the need for faster, more robust, & more reliable transaction processing services. These companies & application engineers obviously understand the value of transaction processing services; however, they haven’t the time, the money, or the resources to develop them on their own. Their focus is where it should be; on their mobile products & services. So they rely on us & our proven experience in the transaction processing space to ensure their accounts & products are properly managed.

Our transaction processing services allow companies to manage all of their mobile consumer accounts & mobile products via simple API interfaces without having to invest any costs or resources to build a network, deploy hardware, ensure security standards, & manage complex databases. We do the heavy lifting so these companies & application engineers can focus on their existing mobile products, new mobile products, & most importantly their customers.

Brian Kirk
VP Business Development
NetworkIP & Jaduka


Why Google Chrome?

September 10, 2008

Since Google released its new web browser, Chrome, last week there has been so much chatter on the web about its features, how it stacks up to Internet Explorer (IE), Firefox, & Safari, & maybe the most important question on everyone’s mind is why has Google developed its own web browser.

I immediately downloaded Chrome when I read about its release. I’m not an application download junkie; however, for a long time now I have been looking to replace Internet Explorer (IE) because too often I have a single browser tab that crashes & then I loose the five to ten active browser tabs I had open. Chrome promises to fix this problem by treating each browser tab as a separate application. When one browser tab crashes, the rest of your tabs should not be affected. After a few days of using Chrome, I was able to test this “functionality” for myself & it worked like a charm. I am forever a non-subscriber to IE & now a happy Chrome user. I’m also a big fan of Chrome’s one stop shop (a single text box) to type in known URLs & do my web searching. The auto completion feature when typing URLs & doing Internet searches is also a great bonus to me.

The BIG question though isn’t what feature do you like or don’t like; rather, why did Google release its own browser? My opinion points towards the mobile market space for web browsing. According to research conducted by Nielsen Mobile, in 2007 mobile Internet use generated over $5 billion in revenue for companies & in the first quarter of 2008 mobile Internet use accounted for a total of $1.7 billion in revenue. Nielsen’s research strongly suggests that we will see a rapid growth in consumer adoption & mobile marketing in the years ahead.

Chrome fits this mobile Internet niche well. Chrome is a very light weight application. The total size of the browser is just 7-megabytes, making it a good fit for the relatively small hard drives that exist in today’s mobile devices. Chrome’s small size makes it a quick & easy application to download to most mobile devices. Chrome also has a minimalist user interface & it nicely accommodates the display size of mobile devices with Internet access. Lastly, when Chrome is running it uses very little memory, making Chrome an ideal application for mobile devices that have limited memory size.

The market research firm ABI Research sees the mobile web browser segment of this market accounting for the vast majority of growth over the next five years. They predict that the number of highly functional mobile browsers shipping per year will grow from 76 million in 2007 to nearly 700 million in 2013. From where I sit Google is quickly putting all the pieces together to dominate this mobile market space. They have already released a number of API’s that will further enable the development of mobile applications & mobile mashups, they have now released the mobile browser (Chrome), & soon they will release the mobile operating system called Android.

The way I see it, Chrome was just one of the few remaining pieces that Google needed to position themselves as a leader in this new mobile market.