Allan Isfan is a co-founder of FaveQuest, a young start-up. This blog covers start-up topics.

Sunday, February 22, 2009



Nasty three way tug of war

There's a three way tug of war going on in mobile and it is going to create massive disruptions in the web which is great news for smart entrepreneurs and great for consumers. Read on.

Two major and radically different worlds are about to collide: the fixed web and the mobile web. We're not quite there yet. A number of websites are not quite easy to navigate on a smartphone (even the iphone), there are missing components on the security side which prevent me from logging on to a number of accounts (I can't do banking for example) and so on. We're not there yeat but we're really close and what will result is one superweb.

Furthermore, accessing this superweb from a mobile device will provide some extra features and services that only make sense with a mobile device: GPS, presence, mobile coupons, mobile payments and so on (many of these services already exist). So while the mobile web is inferior to the fixed web for now, accessing the superweb from mobile will allow us to actually do more. I think that is really cool.

Actually, it is more than cool, it is HUGE

The significance of this superweb coupled with all the app stores popping up everywhere, is that anyone can now provide value to mobile customers in the form of applications and services and with value shift comes a shift in dollars. But how are the dollars going to shift?

Handset manufacturing playing tug of war with carriers

Mobile carriers (Rogers Wireless, ATT, Verizon, Orange, Vodafone ...) have traditionally controlled the end mobile consumer in terms of the critical piece: billing. Any service on your mobile (long distance, voice mail, text messaging, ringtones) was payable to the mobile carrier. However, handset manufacturers are wrestling that away from them with things like app stores. Nokia even announced that it will be including skype with some phones (will start with N97). Nokia might as well just put up their middle finger to the carriers.

An even more concrete example: I bought a twitter app from the app store for 99 cents and my carrier got absolutely nothing for that (Apple and the app developer share that revenue). Add webservices that bypass even the app stores and you can easily see the danger carriers are in: becoming the big dumb pipe. Of course, they hate that. All is not lost for the carriers of course,they are doing some cool stuff too, but that is the subject of another post (I don't think carriers are evil BTW).

Web developers playing tug of war with handset manufacturers and carriers

This one is less obvious but hang on for a bit, I'll explain. Right now, wireless bandwidth is still poor, mobile browsers are sucky and people haven't yet figured out how to build good mobile websites. Apps provide far superior functionality and usability on a mobile phone which explains why they are doing so well. This walled garden is not going to last more than a few years. PCs are now moving more and more to web services in the cloud instead of on-board applications you have to download. This same trend is going to happen in mobile devices since after all, they are simply very small, always connected little computers.

So basically, all seems fairly quiet with everyone catching up to Apple and all major handset dudes positioning themseleves to cut out the carriers from the applications market. While that is happening, bazillions of web people will ultimately be able to reach the consumer directly and cut out even the handset dudes. Fun stuff. Will be interesting to see how it will shake out .... either way though, it will no longer be business as usual which hopefully creates opportunities for you.

Allan Isfan
CEO, FaveQuest

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