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It had better be a really smart phone

A lot is riding on the little piece of technology we have in our pockets. Besides the telecoms companies and handset manufacturers the most recent industries to stake their future on the 3ounce (85g) electronic gadget are Banks and the Music Industry. Both see the mobile device as the key to a rich and rewarding future.

Google and Apple have waded into the crowded market place with new platforms. Other fringe players will be hard pushed to spend the R&D effort to make up lost ground but I think the games have just begun.

In essence we have a three way platform race. While this is reminiscent of the computer platform race in the late 1980’s (Windows, Apple and OS 2), key to the industry is that we already have standards - of sorts. With GSM, EDGE and 3G and an established internet infrastructure to integrate with we shouldn’t see the platform barriers that caused havoc previously. I am sure a fair fight will ensue! It is too early to call a winner but it is looking like we have a  more balanced market than we found with the PC.

But with the market highly competitive and with more and more industries relying on the small bundle of advanced electronics there will surely be great new things happening. Personally, I hope there is more benefit to the new technology than teenagers playing their music out loud on the street or on the train but hey I do have 4 children of my own so peace and quite is a precious thing, right? Or is it I am just getting old in the tooth?

While there are people that dismiss the mobile markets there are three key factors that make mobile phones a sound strategy. 

1)    Large Numbers. Mobiles are all about a little bit from a lot of people. A ringtone at £1 is not really appealing until you realise that when sold to 1 million people it is very attractive with very little distribution cost. Mobile payments are the same. A small value from the vast unbanked is indeed a new untapped market. There are more markets out there.

2)    Locate, Locate, Locate. On a PC we search. On a phone we locate. If I can locate a brand and service easily that I already have an affinity with I’ll be sold. How many times have you tried to find a Starbucks on your blackberry or Sat Nav?! 

3)    Open content. Failure of previous content based provider services can be paralleled by the failure of communism – lack of choice. On a personal note, sadly Vodafone, 02 or any other phone provider cannot cater for my content needs. That’s what the internet marketplace is for. Leave me alone to find my content and I’ll happily use your service.

To make it in the mobile market will not be an easy task by any stretch of the imagination but it looks set to be an interesting fight but how does it apply to Financial services outside of the mobile banking arena?

The concept of Software as a Service, ‘SaaS’, and Service Orientated Architectures, ‘SOA’ are software delivery models that follows very similar principles to those of the mobile strategy with the added value that , extending the capabilities of the software providers’ consulting business for areas such as business process modelling using components that can be integrated to a partners' and customers' assets. In layman’s terms: software vendors should add value by knowing how to plug into a customers process and infrastructure with no overhead costs or footprint.

This approach is more inline with an Apple iPhone even if it is tied to the O2 (UK) or AT&T (USA) networks, whereby the consumer has access to the latest capabilities and information, which can be integrated into their existing infrastructures to meet their usage needs and consumed on a pay per play basis. Why does the software need to be installed locally?

 MacWorld UK recently reported that over 1.1 million iPhones were sold in the third quarter of 2007; with 270,000 sold on the first two days of their US launch back in June, it will be interesting to keep a watch of the SaaS and SOA offerings that appear in the financial software arena over the course of 2008 and the market adoption.


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19 Mar 2009


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