Over 40 % of web page downloads by mobile is done with IPhone in Finland

The Finnish economic daily news paper Kauppalehti (30.8) has an interesting article on the use of mobile phones in accessing the Internet
(http://www.kauppalehti.fi/5/i/talous/uutiset/etusivu/uutinen.jsp?oid=20100815231&ext=rss)
Over 40 % of the downloads are done with an IPhone. The market share of IPhone phones on the market is far far lower. Thus IPhone is over represented. I have a Nokia E71 and I am happy to notice that it is placed second on the list. I have been relatively satisfied with my phone and have used it for c 2 years already.
The article also notes that one of the greatest bottle necks from the perspective of service providers, is the lack of an efficient billing system. I am off course happy with free content, but I understand the need for service providers to find business models other than advertisement based.
An interesting observation is also the fact that there are superusers and that these super users are very important. You might want to look into my PhD thesis or to comments on a Howard Rheingold email interview way back in 2004 titled "email, scale free networks and the mobile internet" (http://thefeaturearchives.com/topic/Networks/Email__Scale-Free_Networks__and_the_Mobile_Internet.html). Super users or super popular services (e.g. Facebook or YouTube are no suprise to me.
Another interesting observation of the article is that some services are becoming "sticky" i.e. users continue to use certain services and stick with the service. The concept of "stickiness" is well described in Malcolm Gladwells book "Tipping Point". Personally I am stuck with the Sports-Tracker service (http://www.sports-tracker.com/#/home) and was prepared to migrate with the service once it recently changed from a beta service to another site, which ment downloading the service a second time and going through some installation phases.

Finland admits failure in building the information society and starts to act?

The Federation of Finnish Technology industries (http://www.teknologiateollisuus.fi/en/) has published a report Digital Finland (in Finnish digitaalinen Suomi -http://www.teknologiainfo.net/content/kirjat/pdf-tiedostot/Sahko_elektroniikka_ja_tietoteollisuus/digitaalinen_suomi-ekirja.pdf?from=11376748755378896).

The report makes an interesting read. First of all it admits that the Finnish Society has to a large extent failed in adopting digital technology and failed in building the information society. I agree with this statement and believe that admitting the fact is the first step to creating change. Secondly the report goes on to show how the Finnish industries can build both products and services, which will help in building change i.e. it argues that this is a potential growth market to Finnish companies. In these respects the report is great.

However I am concerned about the market. I would argue that the potential customers in Finland (and possibly also abroad) do not understand the potential of these new products and services. The potential customers do not know how to build efficiency with information technology. These potential customers need to be educated.

Suvi Linden, the minister of communications in Finland, does not admit failure in building the information society (http://www.digitoday.fi/yhteiskunta/2010/06/25/suvi-lindn-puolustaa-parjattua-tietoyhteiskuntaa/20108959/66). What else could a politician answer when her area of responsibility is attacked. In this respect I understand her answer. However she goes on to argue that many of the elements of building the information society are not and should not be her responsibility i.e. the responsibility of the Ministry of Communications, but the responsibility of the respective ministries e.g. the Ministry of Education and Culture (http://www.minedu.fi/OPM/?lang=en) and the Ministry of Social Affairs and Health (http://www.stm.fi/en/frontpage). I feel that this comment goes along my thinking that the customers - in this case the mininistries representing - the Finnish public sector need to be educated on how to use the possibilities of information tools.

My observation is that there is a need to educate the customer. Lets see if and how this need will emerge.

Are Operators Thieves

Ilpo Mattila accuses operators of thieving (Helsingin Sanomat 10.7.2010). He is fed up with expensive dataroaming prices despite recently anounced price caps by the European union (http://ec.europa.eu/information_society/activities/roaming/regulation/index_en.htm).

Technically speaking operators are not stealing, but if users start to rebel and with pressure coming from the EU, operators will have to reconsider their strategy or they risk to loose both brand value and market share.

One of the problems with operators is that they do not understand the business they are in and in particular they do not understand how and why the business model will change when migrating from telephony to data applications. There is a fundamental reason for the existence of flat rate data plans and why flat rate will spread. You might want to look at my YouTube video in which I argue the logic of flat rate (http://www.youtube.com/watch?v=hIiBPil4tKI)

I believe that international dataroaming will also migrate toward flat rate data plans. If the domestic data plan is 20 euro´s per month which is c 0.6 euro per day, I would predict that paying triple price i.e. 2 euro´s per day flat rate, when roaming, would be more than adequate. However it will take some time before the operator world reaches concensus in this, despite pressure from the Eu. In the meanwhile I will allways check that my hotels abroad have inclusive (free) internet and preferably wlan and will use those services instead of the overpriced international dataroaming

Business models of Facebook

I have recently been observing where the posts of my friends on Facebook are coming from. This is proving rather interesting.

Some friends are posting "via Mobile web" others "via Mafia Wars Game" and some "via Facebook for iPhone". This leads me to wonder is Facebook earning money form e.g. iPhone or other suppliers. Facebook could e.g. try a business model of x cents per mobile phone. The x cents would be embedded in the sales price of the phone and the buyer would not be aware of having paid to Facebook. I have a Nokia phone and when pasting on Facebook my friends see "via Mobile web", which looks kind of dull compared with "Facebook via iPhone", which is nicely cobranded.

I also noted that Facebook is openly advertising its mobile applications with a "Try Facebook Mobile" icon, that is easy to click and proceed to become a mobile Facebook user.

Practical experience with e-social security and e-payments

The Social Insurance Institution of Finland Kela ( http://www.kela.fi/in/internet/english.nsf) has a relatively nice e-service web site. You sign in using the services of your local bank i.e. the bank acts as your authenticator.

This of course has some moral issues. Your bank basically knows that you have been using their service for authentication and you don´t really want your bank to know how sick or poor you might happen to be. In the long run this will have to change, but for the present I trust my bank and I am not too concerned. However markets need competition and I am some what concerned that there are no independent authentication services and regulators should be concerned: are the allowing for an authentication monopoly to emerge? Are they allowing that authentication is a business only allowed for local banks?

However, I was more concerned with the fact that I could not access the e-service account of my under 18 son. He would need to go to his bank to get his authentication codes. The same would also apply if he were a baby. I think Kela will need to change this - parents will need to have access to the e-accounts of their children.

I was more concerned with the fact that I could access my son´s information just by making a telephone call. All I needed to give was his social security number and say that I am his dad. Access to social security numbers is relatively easy and hence missuse of the telephone service is very easy and possible. I would predict that Kela will some day have to adopt better authentication on its telephone service and hence it will be the higher level of security (authentication) that will "force" first Kela and then its customers to adopt e-services.

On a second note on e-services: I was arranging my holiday plans and reserving a hotel on the internet. I use the http://www.hotels.com/ service and regard it as rather nice. This time I studied the payment service more closely. I was rather surprised to note the low level of security related to payment with e.g. a Visa card. All you basically need is the card number and then the payment code on tha back side. Every time I hand over my card to somebody e.g. in a restaraunt abroad I give this person access to my codes. This makes e-payments very unsecure and I predict something will need to be done to make e-payments with e.g. Visa cards more secure.

On a third note on e-services. There was a very good article/column in Helsingin Sanomat 8.7 p 20 by Timo Iivarinen from the Bank of Finland on network payment methods. He is saying that the local banks and the local ecosystem are doing nothing to develop new payment methods and hence new methods will come from the outside. He is basically wellcoming competition from abroad. Finland has now been declared - by a memeber of the bank of Finland - an underdeveloped e-payment market! So, welcome all you pioneers of e-payments!

Testing how to blog directly from my mobile. As you can see the local streets have been full of snow.

Disrupting class - school on your mobile

I had the opportunity this summer to visit Boston USA and Harvard with my family for a holiday. Among many other enjoyable activities we also dipped into a local bookstore. I noticed Clayton Christensen´s latest book (co-authored by Michael B Horn and Curtis W. Johnsson): Disrupting Class – how disruptive innovation will change the way the world learns.

New technologies can cause great (i.e. usually big) companies to fail. The logic is excellently described in the theory of disruptive technologies (http://en.wikipedia.org/wiki/Disruptive_technology). There are already several reviews on Christensen’s latest the book (an interesting review at e.g. http://www.edutopia.org/student-centric-education-technology). Christensen’s book left me with some impressions, observations and suggestions, which emerge from my background as an innovator and pioneer of the mobile internet and which I would like to share with my readers.

In my PhD thesis I studied the emergence of the mobile internet market (http://www.smartmobs.com/2006/12/12/thesis-on-email-scale-free-networks-and-the-mobile-internet/ ) and argued that the mobile internet market, should migrate toward flat rate tariffs and toward applications like mobile email, but that the market is locked in by network externalities (http://en.wikipedia.org/wiki/Network_externalities) to using applications like the text message - SMS - and locked into a business model of transaction based pricing. I argued that network externalities can slow down the emergence of disruptive innovations and in some cases completely prevent the emergence of disruptive innovations.

Changing the way we learn is a social issue and thus Christensen is for the first time to my knowledge, applying his theory of disruptive innovations into a community context i.e. an environment, which one would suppose is full of lock-in situations created by network externalities. Regulations and laws create very strong lock-in situations. To my surprise, this did not turn out to be a major problem in the school environment: governments change and policies change and thus schools also can change and in fact have changed. The lock-in created by policy is in some cases actually far weaker than a lock in created by a technology platform and users that lock each other into a technology platform by network externalities.

Christensen’s observation in disrupting class is very simple: we each learn in different ways and computer software can be tailored to different learning methods. Computer software can enable student centric learning.

Christensen argues that applying the theory of disruptive innovation means addressing a market of non consumption. Do not try to change the existing classroom, change will be slow and the main stream will do its upmost to prevent change. Instead address a market, which is presently small and which is not on the agenda of the mainstream market.

This is sound advice. In my native context Finland, this could mean e.g. addressing the adult learner market. The adults have a problem fitting fixed class room schedules into their business schedules and have thus not really had the opportunity to become consumers of learning, although the need clearly exists. Computer enabled virtual learning environments will create new markets simply because it will enable flexible scheduling. There are also other interesting areas of non-consumption.

The case of the disk drive industry, the original case in Christensen´s theory, shows that disruptive innovations, some times emerge, because of changes, which happen in other parts of the value chain. The disk drive industry changed because of an emerging demand for lap top computers. Christensen, in his book disrupting class also points out issues relating to the value chain: traditional book publishers will probably not be interested in new computer based methods. One should also look at other emerging players in the value chain. I would find distributors of software e.g. game distributors interesting.

The other night I was testing my son’s Swedish vocabulary knowledge. I was also trying to understand the way he learns and how I could adapt to it or how could technology adapt to it. The mobile value chain is changing. The latest mobile phones and operator subscriptions have flat rate access to the internet. On the Internet we have applications like Wikipedia and some forms of network dictionaries. What if I – or somebody else - developed an Internet application, a “wikidictionary”. Then we would ask the schools to insert the wikidictionary platform with e.g. Finnish words and their Swedish equivalent. Remembering that there are about 60 000 kids in their ninth grade in Finland, the task of inserting could be shared and completed in a week. A few weeks from now, my son would, when sitting in his bus, on his way to school, ask his mobile (internet) to quiz him for his Swedish vocabulary.

We parents already have our mobile office. I invite you to share ideas and create a mobile school for our children.

Ville Saarikoski
Helsinki, Friday November 14 th 2008