Amazon is holding an event next Thursday to introduce a second-generation Kindle Fire as well as a new 10-inch version in all likelihood. The company is also expected to "refresh" and upgrade its lower-end Kindles as well. There's considerable speculation about all this going on right now.
I'm less interested in talking about device "specs" (the subject of most of the current discussion) than pricing.
The current Kindle Fire succeeded -- caught fire if you will -- because of the price ($199) and the association with Amazon. Since that time the device has "sold out." In reality sales have slowed dramatically in recent months. Objectively Kindle Fire is quite a mediocre tablet for use cases other than consuming Amazon content.
Indeed, Google's Nexus 7 emerged a couple of months ago to dramatically improve upon Kindle Fire. Nexus 7 is a much better 7-inch tablet at the same $199 price point as Kindle Fire. In a head-to-head match up there's no question of which tablet to buy: Google Nexus 7.
Apple is also expected to introduce a 7-inch iPad Mini next month, along with a new iPhone. The two launches will be separate in all likelihood. The iPad Mini should also be quite appealing to those interested in a smaller tablet. And it will probably be priced competitively (around $200ish). The 7-inch tablet category will thus become a battle between Apple, Google/ASUS and Amazon. Samsung may work its way in with new devices, however.
In terms of features and usability, it's extremely unlikely that the Kindle Fire 2.0 will trump either the Nexus 7 or the iPad Mini. Beyond Amazon's content ecosystem it's chief weapon is pricing -- perhaps its only real weapon now. And in an effort to gain some advantage vs. Google and Apple might we see Amazon lower the price of the new 7-inch Kindle Fire and introduce a cheaper 10-inch tablet (vs. iPad)?
It's quite possible -- even probable. I wouldn't be surprised if Amazon priced the Kindle Fire 2 at $179 and offered a more expensive model with more memory. A 10-inch model might start at just under $400 (to beat the iPad 2 price). Again, price was the main driver of Kindle Fire sales.
Amazon either breaks even or loses money on each Kindle Fire sold but then makes money on content sales and e-commerce thereafter. Accordingly it can afford to be aggressive on pricing. But it can't go much lower than it already has with Kindle Fire.
In any case Kindle Fire 2 is going to be a much tougher sell in a more crowded and competitive market.
Update: CNET is reporting that there won't be a 10-inch Kindle Fire to directly challenge the iPad but two 7-inch versions instead.
My view about mobile payments is the following: once people have a positive concrete experience of using mobile payments they'll be sold, so to speak. Most people haven't had those experiences yet. Accordingly there's skepticism or indifference about mobile payments in the US. This, despite more than 20 companies scrambling in a kind of land grab that anticipates a glorious future right around the corner.
Several consumer surveys in the past 12 months indicate Americans are concerned about security and privacy or don't see the need for mobile payments: "see no benefit," "easier to pay with cash or credit cards" are some of the obstacles facing mobile payments adoption. Roughly 70%-75% of survey respondents say they aren't interested.
I'm the first to point out that attitudes and behavior are often two different things. The survey data are surprisingly consistent. Also consistent are findings that consumers in the 25-55 age range are typically the most interested in mobile payments. More educated, urban and usually more affluent consumers are also typically more interested.
We just completed a survey (n=1,501 US adults), which asked whether people were interested in using their phones as mobile wallets, instead of cash or credit cards. The results are very consistent with other surveys from UC Berkeley Law School, the US Federal Reserve and others.
About 29% of respondents (a decent number) say they have varying degrees of interest. Those who are most enthusiastic, however, are a tiny minority (6.8%).
Again, as people start to have real experiences of mobile payments, I believe these numbers will start to rise. But these findings reinforce the notion that there's a mountain to climb. Providers must educate consumers, reassure them on security/privacy and offer them tangible benefits for trying and using mobile payments systems.
An exception to all this is Square and its various imitators (PayPal Here, Intuit's GoPayment, PayAnywhere, etc.). In most of these scenarios the consumer isn't doing anything new; there's a familiar card swipe. The change is all on the merchant side. However as consumers develop familiarity with and start to trust these providers that becomes the basis for trying some of their "more exotic" payment services, where there is a behavior change (e.g., Pay with Square, PayPal Mobile apps).
While we believe that the mainstreaming of mobile payments is "inevitable," the timing and the specific services/platforms that will mainstream them have very much yet to be determined.
Apigee released new survey findings about mobile attitudes and usage in anticipation of Holiday 2012 shopping. The survey polled 2,200 US adults this month and was conducted by Harris.
It found that 57% of respondents "would consider" buying holiday gifts on their mobile devices. Currently the number of Americans who've made an "m-commerce" purchase stands at about 35%, according to 2012 survey data from IPSOS.
In order, Apigee survey found the following to be the most likely m-commerce categories:
The survey didn't ask about specific retailers but all of the above categories (maybe clothing excepted) are popular on Amazon, which continues to be the single biggest beneficiary of mobile commerce (perhaps after Apple iTunes).
Apigee also asked consumers about the perceived benefits of using mobile (apps):
Just over half of the survey respondents had a negative reaction to the idea that a retailer wouldn't have a mobile presence or offer a mobile app. Most damning, 19% said "it makes me think the retailer is old-fashioned" and 7% said it might hurt their loyalty to the store. Younger users were mostly likely to have a negative attitude toward retailers without mobile apps.
Clearly e-commerce isn't the only reason to offer a mobile site or mobile app. There are many other reasons, including getting shoppers into stores, CRM and providing better customer service in the store (or overall).
I wrote earlier this week about a GroupM survey that offers some very interesting insights about mobile showrooming and in-store shopping. That study suggested ways that retailers can integrate mobile into a larger strategy to lure and keep shoppers in stores and combat the showrooming challenge.
Nokia is spearheading what's being called "The In-Location Alliance." The purpose of the new quasi-trade group is to "drive innovation and market adoption of high accuracy indoor positioning and related services." The assumption is that more accurate indoor positioning will create new markets and new revenue opportunities.
According to the press release out this morning: "The Alliance will focus on creating solutions offering high accuracy, low power consumption, mobility, implementability and usability. It will create an ecosystem that stimulates innovation, enhances service delivery, and accelerates the adoption of solutions and technologies that optimize the mobile experience."
There are 22 companies listed as founding members: Broadcom, CSR, Dialog Semiconductor, Eptisa, Geomobile, Genasys, Indra, Insiteo, Nokia, Nomadic Solutions, Nordic Semiconductor, Nordic Technology Group, NowOn, Primax Electronics, Qualcomm, RapidBlue Solutions, Samsung Electronics, Seolane Innovation, Sony Mobile Communications, TamperSeal AB, Team Action Zone and Visioglobe.
The release also indicates the alliance will promote open standards and systems to allow for broad participation by non-member vendors and third parties.
There are a number of companies already operating in the indoor positioning segment, including Google, Microsoft, Wifarer, Point Inside, Aisle411 and others. Interestingly none of them are on the list above. No carrier is part of this inagural group either. However, the alliance is inviting any and all interested parties to join.
Notwithstanding the promise of new business models, that's one of the central questions: how will some of these companies make money? The superficial response is "deals and advertising." Privacy is also another major issue. However I suspect that can be addressed with an opt-in approach, much in the way that Apple does with iPhone apps requesting to use location.
On the YouTube PC site users are permitted to skip pre-roll ads after 5 seconds. This is a brilliant compromise between the need to better monetize YouTube video streams and Google's general commitment to the user experience and performance-based ads.
If users don't like the ads they skip; if they're interested they watch. The advertiser only pays for those who watch the ad after the initial 5 seconds.
It's a great system and Google has now extended it to mobile YouTube video. Google argues the approach is better for everyone and advertisers get much more value by allowing consumers to self-select the ads they watch:
With TrueView, we’ve developed a model where user engagement matters -- people can skip ads they aren’t interested in after five seconds. Giving viewers choice over ads they watch has led to a better, more engaged viewing experience, benefiting the entire YouTube community of users, advertisers, and content creators.
The argument is persuasive to me. It also forces creative types in agencies to really work to make ads more interesting and entertaining. The epitome of that is the previous Old Spice campaign ("The man your man could smell like"), which was a huge "viral" success.
In mobile, ads are either relevant, entertaining or their opposites. Forcing a broadcast, "interruption" model on mobile users doesn't make much sense. You'll just annoy or alienate your audience. Hopefully other mobile video ad providers will follow Google's lead; however I doubt it.
Electronics retailer Best Buy just reported this week that Q2 profits dropped by 90%. That's partly attributed to the weak economy and partly to the phenomenon of "showrooming," where shoppers look at products in stores and buy them later online. That phenomenon has always existed but it has been "exacerbated" by the rise of smartphones and in-store price comparisons.
As more people buy and carry smartphones they're more inclined to use them in traditional retail environments.
Consumer surveys have indicated anywhere from 50% to 80% (or more) of US mobile consumers now use their phones in stores for product and price information, as well as comparison shopping. Amazon and eBay have been big beneficiaries of this trend, but especially Amazon. Traditional retailers have in some cases suffered and in a few instances (i.e., Best Buy) showrooming has become something of a crisis.
Agency GroupM recently released some survey findings and analysis addressing the phenomenon of showrooming. Roughly 1,000 US adults were surveyed and asked about shopping scenarios and attitudes.
As one might expect, the larger the price difference between in-store items and online prices the more likely buyers said they would be to abandon the store. But somewhat surprisingly GroupM found that even a 2.5% discount could have a significant impact on store abandonment: 45% of survey respondents reported they would leave the store. If prices were 5% lower online, 60% of respondents said they would leave.
There is a difference between self-reported survey data and actual behavior. But the GroupM findings reflect the new consumer mindset.
GroupM identified the profile of a likely "showroomer": younger, female, heavy online shopper and lower income. It also found at the other end that 10% of respondents (loyal to the retailer) wouldn't leave the store regardless of online price discounts. However there's a "marginal showrooming" group that is somewhat price sensitive but can be influenced to "stay in the store."
Factors that GroupM identified to help retailers combat showrooming included the following:
Providing good in-store service, which extends to retailer apps, is a key variable here and one that might cause retail executives to balk. They have generally been de-skilling their workforces for years. However they'll suffer the consequences of poor service and indifferent consumers if they don't do something.
Beyond this, a multi-faceted approach is called for, one that implies a great deal more sophistication than what's on display for most traditional retailers today.
PayPal today announced a deal with Discover Card that will potentially bring its mobile payments services to more business locations than any of its rivals, including Square. The potential reach is reportedly seven million merchants.
The new in-store payments capability should be live by Q2 of next year. Consumers will be able to pay by swiping a PayPal card, that in turn backs onto a credit card or checking account or PayPal account balance. In that instance PayPal is no different than using a conventional credit or debit card. However for some subset of merchants (but still perhaps millions) consumers will be able to enter a mobile phone number and a security PIN on the retailer POS terminal (as in the Home Depot implementation).
That mobile + PIN scenario is potentially faster and more secure than a card swipe. Today there are roughly 16 major retailers that have implemented PayPal in stores. However number is expected to grow by the end of the year in advance of the Discover rollout.
Yet PayPal/eBay will need to educate and aggressively market the service to consumers if it hopes to drive adoption. There will also need to be incentives and rewards to get consumers to try the system. Even though the mobile + PIN approach is more secure than a card swipe consumers often express security concerns about mobile payments. There's a perception they're less secure.
The deal with Discover now vaults PayPal back to a leadership position in mobile payments. However mobile payments isn't a zero-sum game. There won't be a single winner. Several major competitors can operate and succeed. Beyond PayPal and Square the question is: who will be the other winners?
See related posts:
As reported by Reuters late last week PayPal is in a pilot with McDonald's France to test mobile ordering and payments:
McDonald's is testing a mobile payments service featuring PayPal at 30 of its restaurants in France. Earlier this year, McDonald's ran demonstrations of a broader PayPal mobile payments service at its franchisee conference in Orlando, Florida.
A McDonald's spokeswoman confirmed the France tests and said the PayPal demonstration at its conference was part of a booth that features "technology coming within the next 24 months or so."
The concept is that people would order on their mobile handsets and then pick-up that order in a McDonald's location via an express line. However the idea that this system might be coming "in the next 24 month or so" is problematic for PayPal. As the article points out the company is in a kind of land grab or race with other payments vendors but especially Square, which established a major beachhead with its recent Starbucks deal.
In the past this probably would have been PayPal's deal. It now legitimizes Square as a viable alternative to PayPal for larger enterprises.
PayPal has existing in-store payment relationships with Home Depot and Office Depot. Several months ago I used the PayPal system at Home Depot and was unimpressed. There was no real benefit vs. a conventional card swipe. It also didn't expedite the transaction.
However PayPal has international scale, which at the moment Square does not. It's also true that there won't be a single winner in the mobile payments segment. Multiple consumer-facing companies and apps will likely co-exist.
Unlike the Home Depot-PayPal arrangement, which offered no apparent benefit or time savings, the McDonald's trial does offer convenience and time savings to end users.
Getting a payments relationship in place is only the first step. Once these payments systems are in place they become a source of data and a basis for marketing and CRM initiatives.
Many retailers are wringing their hands over the so-called "showrooming" phenomenon, where consumers visit stores to investigate and try products but ultimately make purchases through Amazon and other e-commerce sites. There have been various articles written about how traditional retailers can combat this. Some emphasize loyalty programs while others focus on more "defensive" measures such as developing proprietary SKUs (e.g., Target) so consumers can't scan products in the store and obtain competitive pricing information.
Yet the use of smartphones in stores will only continue grow. It's important for retailers not to fight but to embrace the trend.
While a recent Google survey found only 31% of smartphone owners used them in stores (among apparel shoppers), another survey of 1,557 US adults, conducted in March by Deloitte, found that 61% of respondents used their smartphones in stores.
In addition, data from multiple sources (i.e., InsightExpress, Google, Nielsen) published last year and earlier this year indicate much higher numbers: up to 80% or more use or have used their devices in stores while shopping.
The flip side of "showrooming," the discussion of mobile consumer shopping continues to focus on "m-commerce." However mobile's biggest impact wil be on in-store sales (just as the PC Internet's biggest impact is on in-store sales and not e-commerce). The Deloitte study confirms or reinforces this notion.
The chart below mashes up data from several sources to project that mobile will influence almost $700 billion in offline shopping by 2016.
As with most forecasts these figures are likely to be wrong but it's directionally accurate to say the influence of mobile on traditiona retail will grow dramatically.
What's interesting about the first chart above is how progressively more people use their smartphones as they approach "shopping day." This argues that retailers can provide mobile sites and apps that will support and address consumer needs along a spectrum of time and need: when they're planning to shop to when they're actually in the store.
Mobile apps can provide information that supports the sales and customer service function in stores. (Store and inventory maps could help customers find products; out of stock intems could be ordered for home delivery.) These things can be combined with loyalty incentives and even (eventually) mobile payments in stores. US retailer JCPenney, for example, is ditching its current POS and cash register systems for mobile payments and new payment kiosks.
The larger point is that a great mobile retail app can improve and enhance the customer experience. Retailers don't have to fear mobile.
As Deloitte commented in its report, mobile can increase in-store sales: "Our survey shows that 85% of consumers surveyed who used a retailer’s native app or site during their most recent shopping trip actually made a purchase that day, compared to only 64 percent who didn’t use the retailer’s app or site."
Dunkin' Donuts has introduced iOS and Android apps that enable mobile payments. Ryan Kim at GigaOm used the app at one of the stores and said it worked very much like Starbuck's mobile payments app. Indeed, Starbucks is explcitly the model.
Users don't load a credit card into the app, however, they add an existing Dunkin' Donuts refillable payment card or buy a Dunkin' Donuts payment card through the app.
Below are some screens from the iOS version of the app. It includes a store locator, menu and the ability to send a mobile gift card to others. Another feature that would be nice to see is online/mobile ordering for in-store pickup.
This is yet another example of what I've called "a point solution," which will help educate consumers and bring them into mobile payments in a broader way. They get a very direct experience of the benefits of mobile payments at a famiilar business. If the experience is positive and convenient (clerks scan a 2D barcode at the register) it will help them overcome any fears or uncertainty they may have about the idea of mobile payments more generally.
Dunkin' Donuts has a global footprint with 2,600 stores in 30 countries. The company says it serves 3 million customers per day.
Last week Adobe released a report, based on US consumer survey data (n=1,200), about smartphones, tablets and user behavior. There are numerous findings in the document.
Some of the most interesting concern the specific features or functionality that would help consumers buy via mobile devices (chart below). There were also numerous complaints about the speed of mobile websites (load times) and poor site navigation as areas for improvement.
I'm not going to dig deeply into design and functionality related findings, which amount to specific product recommendations for e-tailers and developers. Most of my focus here will be on tablet usage.
Most Adobe survey respondents reported using tablets "a few hours every week" or at least 1- 4 hours daily. The array of answers is very awkward and probably confused some of the respondents and results accordingly. Previously (October 2011) Pew found that 77% of survey respondents used their tablets daily. As a general matter people report very high levels of tablet engagement and daily usage (at least of the iPad).
Like many other surveys before it, the Adobe data also show that the majority of tablet owners use their devices at home. As I've argued in the past this may change somewhat as the 7-inch tablet category gains momentum. That remains to be seen however.
The most common activities on tablets were email, games, shopping, reading and video viewing. This is generally consistent with other data, however the video viewing response rates in this survey are somewhat lower as is the amount of news consumption. Pew survey data indicate that 53% of tablet owners consume news on their iPads/tablets on a daily basis.
Adobe neglected to ask about tablet substitution for PC usage. Several surveys make clear that people who own iPads are using their PCs somewhat less to a lot less than prior to owning a tablet.
Adobe's survey showed that people are also conducting e-commerce on their devices. Nothing new there. Unfortunately the responses aren't broken out by tablet vs. smartphone. If so we'd probably see much more activity on tablets: smartphones are for research/shopping, tablets are for buying.
The data in the following chart reflect the cumulative value of e-commerce spending over the past year, not average purchase value.
Finally, 60% to 70% of Adobe's respondents said they'd never clicked on a mobile ad. Adobe sees the glass "half full" and says, "A high percentage of consumers surveyed report that they are clicking through mobile ads presented in both mobile websites and apps, with 42% clicking through ads on mobile websites, and 37% clicking through ads on mobile apps."
Here's some additional color from Adobe's analysis of the data about mobile ad response:
Consumers are reporting that a majority of advertisers are providing mobile-optimized experiences when they click through ads on both mobile websites (73%) and mobile apps (77%), suggesting that optimization of mobile ad content appears to be prevalent. Men are more likely to click through on mobile ads presented within mobile apps than women (42% versus 32%). Prioritizing a testing roadmap to include campaigns that target men could yield a strong opportunity for conversion optimization.
My anecdotal observation is that still a large percentage of mobile-ad landing pages and sites are not optimized for mobile devices.
This morning the Wall Street Journal reported that "more than a dozen big merchants are expected to announce Wednesday their plans to jointly develop a mobile-payments network." This new network now goes up against the carrier-led ISIS, Google Wallet, bank-card sponsored systems, PayPal, Square and a range of others. What a mess.
The retailers who've agreed to participate in the new company/system (to be called "MCX") include: Wal-Mart, Shell, Lowe's, Sears, CVS, Publix Super Markets and Best Buy among a few others. They will use customer data and purchase histories to target offers and promotions as part of the system. Those discounts and promotions will also presumably be the incentive to use it vs. others (who will also have offers).
Given that these retailers have more direct relationships with customers than wireless carriers -- ISIS is destined to fail -- they have a fighting chance, provided they can get it right. How easy will it be to configure and use?
Regardless, the addition of yet another payments provider and network into the mix is both confusing to the market and will likely delay consumer adoption of mobile payments. Too many choices causes many people to stick with what they know, which is the existing card-swipe system.
I've argued that "point solutions" (e.g., Starbucks, parking) will drive consumer mobile payments adoption because people will clearly understand the benefits of paying for parking with an app or their Starbucks latte -- as opposed to a more "abstract" system like Google Wallet.
Mobile payments will happen (and are happening in pockets) but all these competing systems are highly problematic for consumers. We're in a "land grab" period right now. Ultimately there's probably room for three or four major winners unless all payment systems are equally built on and can take advantage of the same infrastructure, which NFC-enabled phones and payment terminals can in fact provide. However the NFC-merchant infrastructure isn't yet fully in place.
I won't condemn MCX before I've seen it. But when each week seems to bring a new payments initiative, I have to roll my eyes.
Yesterday Starbucks and Square made a big announcement. The deal is huge for Square and will make it the payments processor for US Starbucks locations. The coffee-lifestyle company also invested $25 million in Square at a $3.25 billion valuation. Starbucks CEO Howard Schultz joined the Square board as part of the deal.
Here are the basic terms:
Why is this important and what's important about it? Clearly it's a massive win for Square, which becomes the undisputed "mobile payments" leader in the US with this deal. It brings, scale, prestige, brand recognition and revenue to Square.
However there's nothing actually new here for Starbucks from a consumer experience standpoint. Starbucks has offered mobile payments through its smartphone apps for some time. That will continue.
Square's "Pay with Square" consumer app and local business directory will also become an accepted form of payment at Starbucks. This will give a significant boost to the app, which hasn't been widely adopted.
I've described Starbucks before as "The American Idol of mobile payments." That's because it's in a nearly unique position to educate consumers and introduce them to mobile payments in a specific context, where they can experience the efficiency and convenience of paying without using cash or physically swiping their credit cards.
I've also recently written that it's this type of "point solution" experience that's going to be the driver of mobile payments rather than abstract, "horizontal" apps such as Google Wallet. Ultimately, however, Google Wallet and others may be the beneficiaries of the Starbucks-Square partnership and the "education" it brings to the market.
The high profile nature of this deal may motivate similar deals or the acceleration of mobile payments at other fast-food and "fast causal" eating establishments. I wouldn't be surprised, for example, if McDonald's initiated a mobile payments pilot of some sort in the very near future.
Being a payments startup is hard, even for one funded by megabank JP Morgan Chase. The Chase-backed GoPago, which launched a mobile app in late February this year, has struggled for awareness and consumer adoption in a crowded market where most people don't even recognize the need for mobile payments.
In addition to mobile payments the consumer-facing GoPago app also provides a range of additional services, including online ordering and a number of small-business marketing capabilities. Before launching the company developed a cloud-based POS system that interfaces with established POS systems. GoPago sought to create a kind of self-contained marketplace for local businesses and consumers not unlike PayPal's mobile marketing and payments strategy.
But that didn't work -- at least not yet. Now the company is using its cloud-based infrastructure to go after SMB merchants, who are also aggressively being courted by Square, PayPal, Intuit, Groupon and others.
GoPago this morning introduced a POS terminal called "GoPago Live," which goes much further than its competitors. Rather than being simply an iPad and software (it uses an Android tablet), GoPago Live offers a complete POS system, a cash box, receipt printer, card reader and 4G Internet access -- all for free. There's also 24 hour customer support.
In return GoPago takes 2.85% per transaction, which is competitive with PayPal and Square. Payment processing is provided by Chase Paymentech. Interestingly GoPago even shields merchants from Amex's higher transaction fees. It will allow merchants to accept Amex for the same 2.85% fee.
Assuming it all works as advertised, I haven't seen a demo, this is a pretty compelling package for local merchants. GoPago told me that the company is targeting neighborhood businesses with revenues in the "low six-digit range."
The challenge once again is rising above all the "noise" in the market. But the substantial cost savings available to merchants using GoPago Live (perhaps between roughly $5K and $15K per year) should help drive word of mouth and general SMB awareness. And while the Chase connection didn't help very much in getting consumers to adopt the mobile app, GoPago may have more success using Chase to drive awareness and adoption on the merchant side.
Nielsen has identified the top mobile shopping apps for June in the US market. The list is as follows:
While eBay and Amazon have been on top of this list since its inception, ShopKick and Walgreens are a bit of surprise to me. However it's not clear precisely how Nielsen defines the "shopping" category.
While eBay had a little over 1 million more users than Amazon (13.16 vs. 12.12 million) the time spent with the eBay app was much more than Amazon users (1:04 vs. 18 minutes). The discrepancy can likely be explained in the fact that Amazon users are probably much more directed, looking up prices, reviews and product availability while eBay users probably browse and look at many more pages.
Beating both by a mile was ShopKick, with three hours, 19 minutes (3:19) on average June. That kind of engagement is truly impressive.
Last night Nuance Communications took the wraps off Nina, a virtual assistant for enterprise mobile customer service apps. The comparisons to Siri are immediate and obvious. However Nina doesn't directly compete with Siri; it's not a consumer app. Rather Nina extends Siri-like "conversational" interactions to enterprise mobile apps -- in the hope and expectation of delivering better customer care experiences.
Dan Miller has written up the announcement and what it means for mobile customer service on the Opus Research blog. The first announced enterprise to take advantage of Nina is bank USAA (launching next year). Nuance is offering a developer SDK and APIs and is enabling customization, extending to the persona/voices. Consequently one enterprise's version of Nina can look and sound very different than other's.
For purposes of this post, however, I want to focus more narrowly on one piece of the Nina experience: password voice authentication. This is unlikely to draw much coverage and will be overshadowed by the Siri comparisons and discussion.
Password voice authentication for mobile devices is a technology that has existed for some time. But there's no mainstream implementation of this capability really until now. There's also beta product called Kivox, available for Android handsets but not through the Google Play or Amazon markets. It has to be downloaded directly in a convoluted process that will elude mainstream users.
It's very painful to enter passwords manually (password and username) on a smartphone. And it has to be done again and again. While Safari and Chrome offer to remember passwords that doesn't always work. By contrast voice biometrics for password entry is an elegant solution to the small screen problem. It could also eliminate the need to create conventional passwords entirely. There would be nothing or very little to remember or write down. You'd just speak your "passphrase."
The voice authentication capability is actually part of a separate module that Nuance offers. It can be integrated into apps without the full Nina integration. I'm not an expert on voice biometrics -- Opus' Dan Miller is the leading expert on voice biometrics and chairs the VoiceBioCon event -- but this is the part of the Nina announcement that I was most excited about.
Assuming it works well, it relieves a major headache for me in dealing with passwords on mobile sites and smartphone apps. While Nina will undoubtedly be widely adopted and successful, voice authentication has the potential to be equally transformative of the user experience. So would voice-initiated payments and transactions, but that's entirely different post.
Below is a video showing a demo of Nina.
Yesterday I spoke with yet another company in the mobile payments space. It faces challenges of awareness and adoption, like most competitors in this segment. Also yesterday Google Wallet upgraded to enable any credit or debit card to be used in conjunction with the app. The problem is there are only six phones in the US, operating on the Sprint network, that are compatible with Google Wallet. Verizon, AT&T and T-Mobile either don't have Google Wallet-enabled phones or aren't permitting its use right now (i.e., Verizon).
Today TechCrunch reports on new funding and a new CEO for QuickPay, a mobile parking app. In addition to QuickPay, I have two other parking apps on my iPhone: Parkmobile and PayByPhone. I love these apps because they enable me to pay for parking very efficiently, without relying on coins or even a credit card (which was a great innovation at parking meters until mobile apps came along). With these apps I can also extend time remotely, which means I don't physically have to go back to the meter.
The superiority of the experience afforded by these apps vs. the old way of paying for parking is dramatic. This is the kind of scenario (point solutions with specific use cases) that will drive consumer adoption of "mobile payments," which won't be seen by consumers as "mobile payments" (with all the corresponding security fears) but simply as a great convenience instead.
Once consumers have become accustomed to using mobile payments point solutions such as parking apps, they'll be much more comfortable with mobile payments generally and embrace mobile wallets such as Google Wallet -- provided there's merchant adoption and general availability.
ABI Research is projecting that mobile devices will account for just under one quarter (24.4%) of all e-commerce by 2017. If "mobile" is defined to include tablets, then maybe. But if we're talking about smartphones largely or exclusively there's a long way to go before that happens.
Despite the fact that the data now show a majority of smartphone users have made purchases on their devices, most people don't routinely engage in e-commerce via smartphones. Security fears and the problem of entering credit card numbers are major barriers to so-called "m-commerce." Tablets by contrast are driving lots of purchase behavior.
A majority of smartphone owners (80% to 90%) use their devices in stores to check prices and get reviews and product information. However most don't go on to buy -- unless it's through eBay or Amazon.
As a general matter, if people are going to buy "online," they later go to their PCs and make purchases. Nielsen data, compiled by eMarketer, show that a minority of users (5% of smartphone owners) are buying things directly through mobile devices -- in this case in response to a mobile ad. But these data are also reflective of the general fact that most people don't buy on smartphones.
According to Nielsen the top mobile "shopping" apps are the following
Amazon and eBay in particular have invested hugely in mobile and it has paid off -- literally. Amazon in particular has your credit card on file and can enable a mobile transaction with a single click.
By contrast, most e-commerce sellers lag far behind these leaders. And to drive the kind of shopping volume that ABI is projecting the "credit card problem" needs to be solved. Large retailers with whom shoppers have direct relationships (e.g., Target, Macys, Wal-Mart) can store credit cards on file and remove friction accordingly.
However "no-name" e-commerce sellers are not going to be able to participate in smartphone-based commerce unless they address the payments problem, which could be via PayPal or using a solution such as the one offered by Card.io. Indeed, it's far from clear that the ABI prediction will come to pass.
We're probably looking at a situation for the medium term foreseeable future where smartphones are aggressively used by consumers for research and price comparisons but generally not used for conventional e-commerce transactions except in select situations such as I've described.
Microsoft did a nice job in reinventing its mobile OS with the advent of Windows Phones. There are ways in which the "Metro UI" is beautiful and strikingly different than iOS and Android. However the UI also represents the greatest barrier to adoption of Windows Phones.
Until people have a chance to use and familiarize themselves with Windows Phones they won't buy them because of the perceived unfamiliarity. Agressive discounting in the US may convince some to do so however. But as long as there are relatively few Windows Phones "out in the world" the impulse to buy them will also be limited.
It's Microsoft and Nokia's version of the "chicken and egg problem." Targeting new smartphone owners is probably the best strategy to gain share for the companies in the near term. Once they have some users they can upsell them to more expensive and high-powered phones.
Among developers however, Appcelerator has discovered that there's an increasing appreciation for the Metro UI. In a survey of more than 2,000 mobile developers, 44% of them characterized the metro UI as "different and beautiful" compared with iOS and Android.
That 44% hasn't yet translated into a belief that Windows Phones will succeed -- even in the enterprise, where Microsoft has had historical advantages over competitors. Developers in this survey do think that BlackBerry is essentially dead in the enterprise (which would mean death for the company overall) and thus by default that Windows will be the "third ecosystem."
Speaking purely for myself, the Windows Phone homescreen is a barrier to adoption. While the "live tiles" are supposed to facilitate quick access to content and enable us to "get back to our lives" I find them awkward and off-putting. I think the modifications of Windows Phone 8 make it worse.
The "inside" of Windows Phone is much better and more pleasing. Regardless, I think the outlook for Windows Phones (and by extension Nokia) remains very mixed at best. Unless or until Microsoft and Nokia can get these phones in people's hands they'll have trouble winning share.
One of the chief innovations Google is bringing to its "Jelly Bean" Android update involves local search and related functionality through Google Now. I've written fairly extensively already about these new features on my Screenwerk blog and Search Engine Land. In short, the new Android OS offers information "cards" (structured data) in response to a range of query types, especially local.
This is at once an evolution of the Google search experience for mobile devices and an effort to better compete with Apple's Siri. The information (search result) is more attractively presented and substitutes for the traditional page of search results, which still can be found by scrolling to the bottom. In addition to the image above right, below are a few example screenshots:
This new presentation is more consistent with what mobile users want ("answers") and offers a better experience overall than a conventional page of "blue links." The potential problem for Google is that this approach goes much further in the direction of substituting "Google's own content" for third party information, which is at the center of Europe's antitrust dispute with Google.
The issue of of Google showing its "own content" at the top of search results or in a preferential position is one of four "concerns" raised by the EU in May along with an invitation to settle. Because it goes to the heart of Google's control over the search results page and the company's ability to experiment and innovate with new content presentations, it's one of the most potentially challenging issues for Google to negotiate with the EU.
Google has been trying to avoid a formal antitrust action by European regulators. But just as it was negotiating to settle the case, EU Competition Commissioner Joaquin Almunia, last week, asked Google to make "broad changes" to its mobile services. While it's not clear specifically what he is asking for, the path adopted by Jelly Bean -- which completely marginalizes third party content in a range of cases -- exacerbates one of the EU's fundamental "concerns" about Google.
Google is not going to want to be locked into any specific search results page in mobile. It will demand the ability to change the look and feel of the page and to innovate around the way it presents content. But to the extent any such innovations don't involve equal exposure of third party information the Europeans will probably have strong objections.
The next couple of weeks should determine whether Google will be able to negotiate a settlement or whether the company will face a formal antitrust action (and potentially billions in fines) from the EU.