The future is mobile: Smartphones gain edge over non-smartphones
Today the Mobile World Congress was opened in Barcelona, arousing people’s interest worldwide. Under the motto ‘Redifining Mobile’ the world’s largest fair for mobile devices promises to boast a huge number of novelties. New, more powerful devices and mobile business models are amongst the most attractive topics for visitors. Indeed, the world of mobile devices sees some kind of upheaval: Going online via mobile becomes more important than simple voice communication. According to estimates by Germany’s Federal Association for Information Technology, Telecommunications and New Media (BITKOM) based on figures published by the international market research institution EITO, in 2012 more Internet-ready smartphones will be sold in Germany than traditional mobile devices (15.9 million units vs. 13 million units). Market researchers at ComScore also predict increased penetration of markets worldwide with smartphones. The threshold of 100 million units sold was already passed in the US. No wonder that Microsoft will introduce its new OS Windows 8 in Barcelona and not at the CEBIT. The new Windows 8 is supposed to be the first OS that can run simultaneously on PCs, tablets, smartphones and hybrid devices.
A recent comparison highlights the differences in market penetration across Europe. At the end of 2011 around half of the population in the United Kingdom possessed a smartphone (51.3%), while in Germany it was just a bit more than a Third (37%). Compared to 2010, smartphone penetration in the below five EU countries increased by 44% in total:
Source: Figures by ComScore, table by Statista
App economy impacts traditional markets
The app market sees a boom like never before, which also impacts traditional industries like the publishing industry, health services and the transportation sector. According to figures by BITKOM, German smartphone users downloaded 962 million apps in 2011 (+249% compared to 2010). Mobile app sales reached a volume of EUR210 million last year (+123% compared to 2010). This figure includes sales of apps, services and advertising revenues through an app. About 80% of apps are available for free, while the rest is paid content.
Source: BITKOM, research2guidance
The future is mobile
Smartphones change consumer’s behavior, especially in POS. According to research results by ComScore more than half of US smartphone users use their mobile devices for purchases at real-life retail shops. Therefore it is about time for customer-oriented retailers to shift their focus on the mobile channel.
LEGO cult going digital: Introducing LEGO’s social network ReBrick
Putting aside the dark years in the 90s when the LEGO brand almost perished, those little colorful plastic bricks are simply cult with every age group. The Danish toy manufacturer saw a rise in its 2011 German sales figure by 13.7% (EUR297 million) – double the growth of the entire toys market. With a market share of more than 15%, LEGO is the market leader on the German toy market and comes in third worldwide. The company pursues a quite diversified marketing strategy to address the different target groups.
The brand’s interesting marketing concept focuses on a private label media approach. Based on its customer’s demand the company established a tight net of Consumer Touch Points using its own digital channels and LEGO communities. The company’s approach might well serve as a benchmark for other companies pursuing multi-channel communications. Read on to know more about the most interesting projects.
Own social network
LEGO bricks can be bought via the big online retailers like Amazon or through eBay, but apart from that there s also the LEGO eShop. LEGO fans are quite willing to share, which is why all of LEGO’s activities are accompanied by social media measures. 1.6 million fans are following LEGO on Facebook. There are also numerous other groups and a Twitter account. Recently, the LEGO social network was launched: LEGO fans aged 13 years or older can share their own creations via LEGO ReBrick with other enthusiasts. Functionality is somewhat limited yet, but users can share images of their creations, comment on them or like them. Users can also found new communities and connect with the established social networks.
LEGO launched its own social network ReBrick
Innovation and cooperation drive the business
In order to achieve further growth, the company’s business model was extended adding the target group ‘male adults’ and ‘girls’. Retro-style VW minibuses and heavy-duty construction site equipment at prices around EUR200 are targeted at technology-savvy men. There is even an own site for this target group called ‘LEGO for men‘. ‘LEGO Friends‘ on the contrary is targeted at young girls. The brand’s products are thus not only good entertainment for kids to play on their own or together with their dad, but also for the parents who buy it for their own entertainment.
LEGO’s business model incorporates LEGO brick adventures for adult men and fathers of kids
Via cooperation with big companies of the entertainment industry like Disney, Lucas Arts and Warner Bros. as well as licensed cooperation with video game manufacturers, LEGO seeks to tap the markets of Star Wars, Ninjas, Mickey Mouse, Harry Potter and the like. At the end of last year cooperation with British daily ‘The Guardian‘ stirred up a lot of interest as scenes of important events in the same year like the royal wedding or the Occupy-demonstrations were rebuilt using LEGO bricks. Since 2010 the company has been working together with NASA to foster kid’s interest for science and technology worldwide. At its campaign site ‘LEGO Space‘ young researchers can get more information on real-life projects via videos, photos and learning material. LEGO has also become a cooperation partner of German soccer team FC Bayern Munich. An iPhone app helps users to ‘legorize’ their images and since 2009 animated packaging has been available at retail stores. For this, customers have to place the LEGO package in front of a camera in a digital box and an animation of the readily built contents will be visible.
Case Study PayPal: The future of shopping is mobile
The number of consumers accessing a retailer’s website via mobile device is constantly increasing. Tools to compare product prices and bargain apps have since long been influencing the sales figures of a retailer. A research study by Google shows the importance of smartphones and mobile websites to drive sales. One of the dominant topics in 2012 will be the one of mobile payment. The fight between the finance, digital and telecommunication sectors for this untapped multi-billion Dollar market is already ongoing. The world’s largest online payment service PayPal aims at introducing its payment procedure for mobile and traditional retail. To further develop mCommerce, the company is already testing various payment concepts. PayPal adjusted its global sales forecast for 2012 up by 75% to US$7 billion. In Germany, PayPal already reached a turnover volume of US$170 million with its introduction of the mobile payment option ‘PayPal Express Mobile‘.
According to Holger Spielberg, Head of Mobile Payment & Innovation at PayPal Germany, PayPal places its bets on cross-channel QR shopping codes, because up to now this is the only developed technology on the market that makes mobile shopping and mobile payment possible everywhere regardless if it is a retail store, webshop, smartphone or ATM. At the same time, another project is underway in Sweden, which focuses more on NFC-technology. And in the US, a cloud-based solution was initiated at Office Depot and Home Depot retail stores enabling consumers to pay via mobile phone number and a PIN code. The below ‘Future of Commerce’ video shows how the future of shopping may look like:
Shopping via QR code in the subway: PayPal launches ‘Shop and Pay On-the-Go’ pilot in Singapore
Tesco’s mobile supermarket in South Korea demonstrated quite impressively how to convert advertising space into a POS. German pharmacy franchise Budnikowski followed Tesco’s example and also launched its virtual shop via outdoor advertising posters. Singapore, with a smartphone penetration of 70%, has now become a test place for PayPal: In 15 subway stations consumers are able to shop virtually via posters with QR codes. PayPal offers products from eight local partners. Via a smartphone app consumers can scan the product and pay with PayPal. The purchased goods can then be picked up at a nearby store or they are delivered to the consumer’s home. The advantage for retailers is that they do not have to invest in additional infrastructure.
Top 10 of the most popular Google+ pages in 2012
Marketing on the social web increasingly develops its own dynamics. More and more brands allocate their marketing budget towards the creation of pages on social networking platforms. Only three months after Google+ launched its corporate page feature, the numbers of users has thrived. 62% of the Interbrand 100 already own a Google+ page. 17 brands have more than 100,000 followers. The brands are relying foremost on the power of images: More than 60% of the communication content goes to images, sources at Simply Measured say. Only 29% are articles and 16% videos.
Top 1 on Google+ is Swedish fashion retailer H&M with more than 500,000 followers. Burberry comes in second with some 400,000 followers and Samsung USA is on third with 385.000 followers. Coca-Cola, number 1 on Facebook, is placed only sixth with 350,000 followers. It is quite obvious that the reach of brands at Google+ is much smaller than on Facebook, which is quite an established channel for most brands. H&M reaches 9.8 million fans on Facebook, Coca-Cola 39 million, Starbucks Coffee 28 million and Burberry 10.8 million. A lot of this might have to do with the fact that most brands still have difficulties to find their very own Google+ optimized strategy. Most of it is just trial and error at the moment.
Here is the list of the Top 10 brands on Google+:
Pinterest: New social bookmarking service with mainstream potential?
Facebook’s IPO announcement created quite a buzz. But it did not take long until a new social media service was in everybody’s mouth across the IT industry. Pete Cashmore, CEO of Mashable, commented on CNN that he thinks Pinterest is the ‘hottest’ website in 2012. What do we know about this company? Their website was founded in 2010 and currently is still in its beta-phase. In October 2011 Bessemer Venture Partners invested US$10 million and Andreesen Horowitz invested as much as US$27 million in venture capital. The company is currently valued at US$200 million, but apart from affiliate programs that were not announced publicly, there is no significant turnover. According to their own statements the company does not even pursue any commercial goals. However, we see an explosion in users, particularly among women. Pinterest has become one of the Top 10 social sites in the US and increasingly takes on a role as an important traffic generator for eCommerce sites. The success of Pinterest already initiated the business drive for German look-alikes: Pinspire and LikedBy based in Berlin are exact copies of Pinterest.
Pinterest enables users to bookmark photos and videos. The concept behind Pinterest is quite simple and the visual implementation makes it all the more easy to explore and share content. Just like Twitter or Google+ users can follow each other and pin their discoveries on the web to their own Pinterest wall. Like Facebook, images and walls can be ‘Liked’. But beyond these functions the network also offers services established platforms – especially eCommerce platforms – don’t have in their portfolio: Pinterest enables users to ‘window-shop’ and browse randomly. Browsing is not targeted like a price comparison on Amazon or Google Search. Exactly that is what makes it attractive for the mainstream market – as an alternative for product recommendations and reviews.
Some companies have already started to conduct first experiments with Pinterest. Mail order company Land’s End launched the raffle ‘Pin it to win it’. On their product pages they not only integrated a ‘+1’ button for Google+ and a ‘Like’ button for Facebook, but also a ‘Pin it’ button. With this, the company called upon users to create virtual Land’s End canvas pinboards in order to win. Michele Casper, Director of Public Relations, explained that the main goal behind the campaign was to generate awareness and to ignite user’s interest: “Lands’ End Canvas is continuously looking for new communication channels and opportunities to introduce new customers to the brand”. Brands like GAP, Whole Foods, Threadless, Travel Channel and even General Electric made their first steps with Pinterest.
Some brands already experiment with Pinterest: Raffle by Lands End
Conclusion: Pinterest’s concept of focusing on elements that established eCommerce platforms tend to neglect is quite exciting. The typical consumer’s interest does not necessarily start with an optimized search process, but by browsing through things available. The visual presentation makes it much more attractive to browse through items; get inspired and interested to buy something new. It is exactly this concept that gives Pinterest the potential to become a mainstream platform. In the end it is not important for companies if or if not this particular platform will become successful. The platform is merely a part of a broader strategy. It is necessary to check first if and how social media or a certain platform can add value. Depending on a company’s goal or target group, the result of this evaluation might look totally different.
Milestone reached on the smartphone market: More smartphones than PCs sold in 2011
The era of smartphones has officially begun: According to a recent report by market researchers of Canalys, 2011 saw more smartphones sold than PCs – a new record. 488 million smartphones were sold world-wide, a plus of 63% compared to the year before. Desktop PCs were sold 415 million times, 15% more than the year before. These figures are even more impressive considering that Canalys put tablets and netbooks under the PC category, not under smartphones.
The development of the client PC market is quite diverse though: The number of tablets sold in 2011 rose by 274% compared to 2010, while sales figures for netbooks went down by 25%. Notebook sales increased slightly by 7.5%, desktop PCs by 2.3%.
Milestone: Smartphones became a mainstream product within just a few years
Source: (c) Canalys
Android continues to be the market leader
Comparing operation systems, Android-operated smartphones are in the lead with a market share of 49% of all smartphones sold in 2011. iOS comes in second with a 19% market share and Symbian is on third with 16% market share. Apple sold 93 million iPhones in 2011 (+96%). In the final quarter of the year alone Apple’s sales figures reached 37 million units. Apple thus continues to be the leading smartphone manufacturer.
Smartphone market in 2011: Android asserts leadership
Source: (c) Canalys
Facebook: Countdown to IPO
It has been rumored for quite a long time, yesterday it was finally announced that Facebook will go public. Exactly eight years after Mark Zuckerberg founded Facebook on Wednesday, February 1, 2004, the social network submitted its IPO application to the US SEC. Not only traders are excited about the most spectacular IPO of all time. There is rarely any medium where Facebook is not or was not in the headlines. In the US, the move by Facebook was reason enough to interrupt the regular broadcast schedule to break the news to viewers.
Hard facts: US$1 bn in profit, US$3.7 bn in turnover, 845 mn active users
Returns on the IPO are estimated to amount to US$5 bn. While an exact valuation of the Internet giant cannot be made on basis of speculations, rumors have it that the company is worth US$80-100 bn. The date for the IPO is also still a secret, but observers expect it to be between April and June. According to the company’s documentation, the turnover of the world’s largest social network was US$3.7 bn in 2011, most of it was generated through online advertising (US$3.154 bn). Compared to the 2010 figure – US$1.974 bn – this means a plus of 88%. In 2011, the company’s profit was US$1 bn (+65%). Facebook was not making profits until 2009. In that year profits hit US$229 mn. In 2010 the figure read US$606 mn. The figures for the number of users which Facebook delivered with it’s IPO application are stunning: There are 845 mn active users on a monthly average, 483 mn people access Facebook daily and 425 mn people go on Facebook via mobile. 2.7 bn ‘Likes’ and comments are posted every day.
User activity on the world’s largest social network
Source: Facebook IPO
Betting on the future
Undoubtedly, a lot of money is at stake for Facebook, shareholders and banks. US investment banks Morgan Stanley, Goldman Sachs, Bank of America, Merrill Lynch, Barclays Capital and JP Morgan are contracted to make Facebook go public for US$500 mn. There are heated debates around the question if US$ 1 bn in profits can really be translated into US$100 bn of net worth. Facebook’s IPO is often compared to that of Google in 2004: The IPO of the search engine giant generated US$ 1.7 bn in returns, which translated into the company’s valuation of US$23 bn. Google’s current market capitalization is at approx. US$190 bn, profits at US$9.6 bn.
Between euphoria and skepticism
Potential investors are advised to think twice since expert opinion is somewhere in between extreme euphoria and skepticism. German newspaper Süddeutsche Zeitung printed a very concise pro-contra analysis on p. 33 in today’s issue. As per the newspaper, the most important reason for the company’s high valuation is that Facebook is a milestone in the way millions of people communicate with each other every day, seemingly nobody can live without it anymore. When all the user data is used to generate profits, advertising revenues will sky-rocket. Facebook is an ideal platform for companies to generate business. There are no limits for growth phantasies. The arguments against the validity of such a high valuation are built exactly on these exaggerated visions for business growth and the fear of a second dot.com bubble. On top of this, Facebook does not benefit from growth in newly industrialized countries such as China. Problems regarding data privacy and patent issues will emerge.
Google will be measured on Facebook
The industry’s paper SAI Business Insider brought up an interesting comparison between Google and Facebook, showing both comapanies’ development during their first seven years in the Internet business. In this, Facebook’s turnover figures are significantly lower than those of Google. The article in SAI explains the different development with the fact that Google has found it’s own “business magic” in tailored advertising, which Facebook is still lacking. The question for potential stock investors is whether or not Facebook will find its own certain kind of magic to satisfy all the expectations for growth.
Can Facebook uphold its promises for growth with the largest IPO the Internet business has ever seen?
Source: SAI Business Insider
Booming mobile market in China: 1 billion subscribers until end of March
It was just a question of time until the Chinese mobile market would outgrow the US mobile market. In fall 2011 the market volume of China finally surpassed that of the US. According to research by Strategy Analytics 23.9 million smartphones were sold in China in Q3 alone (+58% compared to Q2). At the same time, the number of sold units in the US sank by 7% reaching 23.3 million units.
Recent figures in a report by Wireless Intelligence published via GigaOM show that the Chinese mobile market has become one of the most important markets world-wide: China is about to reach the magic threshold of 1 billion subscribers. The growth of this market can be attributed in particular to the popularity of 3G services, which hold a 22% market share. In 2010 this market share was less than 10%. The 3G standard is of vital importance for digital communication: Only this standard allows the transfer of larger data packages, such as images and web-based communication features.
According to Wireless Intelligence China had 973.7 million mobile phone subscribers at the end of 2011 (+16% compared to 2010). This translates into a market penetration rate of roughly 72%. Three providers share the Chinese mobile market: China Mobile is the market leader with a 67% share, followed by China Unicom and China Telecom. China Unicom is the only provider of iPhones at the moment, but it is rumored that Apple and China Telecom will reach an agreement soon. Apple already announced last year that China is perceived as its second most important market after the US with a sales share of 16%. Katy Huberty from Morgan Stanley illustrates in one of her analyses the market potential for Apple: According to her estimates, Apple could sell as many as 60 million iPhones in China per year. The forecast might be a bit shaky, but comparing this figure with Apple’s world-wide sales figure of 100 million units it becomes quite apparent how big the market potential of China is – not only for Apple.
University of the future: Free-of-charge online lectures by elite universities
Sebastian Thrun, Stanford professor emeritus, presented nothing less than his vision of a ‘democratized higher education’ at the recent 2012 Digital Life Design (DLD) Conference in Munich. It all started with an experiment: Thrun, an expert for artificial intelligence and researcher at Google, offered his Stanford standard curriculum seminar on the ‘Introduction to Artificial Intelligence’ online for free. The results were overwhelming: 160,000 students from 190 countries worldwide enrolled and attended the three-month seminar. At the end of the term, 23,000 students passed the seminar, 248 even with 100% of all points. The only downside was, that the attendance certificate granted to students was not one of Stanford, unless the student was already admitted there.
stanford engineering everywhere: High reach for free-of-charge online lectures held by renowned professors at Stanford University
Stanford is one of most renowned universities in the US. Already in 2008, the university offered lectures free-of-charge for everyone. Under the label stanford engineering everywhere, the University’s software engineering department for example offers various classes online. More online classes can be found HERE. Starting Spring 2012, the Massachusetts Institute of Technology (M.I.T.) will make available free-of-charge classes via its interactive platform M.I.T.x. Students that successfully completed the class will also receive an official certificate from the MIT.
In 2012, Stanford University will offer more free-of-charge seminars held by renowned lecturers online
Many top players among the international universities make already use of digital media, in order to attract the brightest students. Most of them refer to iTunes U(niversity), the education section in Apple’s iTunes store. Since 2009, Munich’s LMU University is also connected to the Apple store, offering free downloads of digital contents and results for lectures, research and the University in general. Since it’s launch, the University’s portal has seen 12 million downloads – a clear indicator for high demand in digital education contents. Another example for digital education is tele-Task by the Hasso-Plattner-Institute for Software System Technology. Many other German universities are just in experimental stages.
Founding of Udacity.com: A start-up business to democratize higher education
Thrun said during his speech at the DLD, that this one seminar he offered online for free has had more influence on education than his entire previous career. The whole seminar can be seen on YouTube. Because of the overwhelming results, he founded the education platform udacity.com together with other colleagues, where the most up-to-date knowledge and research results are to be made available to students from all over the world for free. Equality in education for all under the slogan: ‘Democratizing Higher Education’. Among the contributors are some of the world’s most renowned lecturers and students from all over the world. One of the earliest topics was how to program a search engine or a ‘Robotic Car’.
University of the future: Equal education for all on udacity.com
Conclusion: It is about time that education institutions recognize the value of modern technology and employ it actively. Universities should consider the potentials of digital technologies and how they could enhance teaching. It is expected, that with the introduction of online lectures for free the rules of the game will change somewhat. But the initial investment is quite high. According to the NY Times, the MIT alone eats up millions of Dollar for its new digital platform. The challenge for professor Thrun is to make his platform valuable enough even without the brand ‘Stanford’ in order to survive on a highly dynamic market.
Chinese New Year: 2012 – Year of the Dragon
2012 is the year of the dragon.
It represents not only the former symbol of the Chinese emperor – nowadays, the dragon is still a famous talisman in China. The year of the dragon is affected by innovation, enthusiasm and strength. Ambitious goals can be achieved and major projects will be implemented successfully.
We want to thank our clients, our employees and service providers for good co-operation, exciting projects and the confidence placed in us in 2011. Together with you, we are looking forward to a fascinating and promising year 2012.
