The all-computer run NASDAQ could be to blame for a lack of a Facebook stock pop Friday, when the social network started its first day of trading. Orders flooded in...
Hi. While this blog is a part of Seed Catalyst’s website, I realised over the initial few weeks that a lot of you are first introduced to the firm via the blog rather than our home page.
So to introduce myself - I’m a business consultant working with early stage technology firms to help streamline their strategy and go-to-market approach and support them for fund raising.
With this blog, I aim to capture key market trends that I see in the industry, the ecosystem and cross-plays in some of the more interesting and upcoming sectors, as well as cover interesting companies that I meet.
I will also be addressing vexing and interesting valuation and deal/term-sheet structures that would be of interest to technology start-ups at various stages of their growth.
I just checked some of my previous articles and realised I hadn’t covered the mobile advertising and ad network fill rate report from Smaato. They release the report on a monthly basis and it’s a useful indicator to see the flow of subscribers and ad revenues.
A few interesting tit-bits from their June coverage:
Click-through rates (CTR) while on a downward curve have been the highest on the Symbian and feature phone platform.
Chart 1: Smaato Index – Operating System CTR (Click Through Rates) worldwide, June 2010
The interesting development has been in the US where the Android platform which has jumped to second place in June with a CTR Index of 192 (118 in May). Feature phones are in fourth place with a CTR index of 80 while Apple iOS drops down to fifth place with a CTR Index of 73.
A brief cut of the monthly comparison on a world-wide basis:
Chart 2: Smaato Index – Operating System CTR (Click Through Rates) worldwide, first half of 2010
However, in all honesty, the Android drop from Jan to March made me feel like there was a data entry error here. I’ll be eagerly waiting for the July report.
Another interesting parameter was the fill rates of the global top 10 ad networks. While the average is around 22%, in June only four ad networks were above the average. In fact, the top performing ad network lost 40% from May to June. On the positive side, in South Africa, thanks to the world cup the best performing ad network had a fill rate of 92%. Another quirk of the South African market during the world cup period was the CTR rates – the highest was on the feature phone platform followed by the iPhone. Symbian was a close third with Android lagging behind in fifth place.
I wouldn’t want to read that as people with iPhones are more fanatical about football than people with the Android platform! But I do think it’s an interesting aberration.
And finally here’s the CTR chart for Europe. The Blackberry performance is dismal!!
Chart 3: Smaato Index – Operating System CTR (Click Through Rates) Europe: UK, Germany, France, Italy Spain, June 2010
Not only was it in the fifth place but it is also the only platform which dropped from May to June.
In continuation of the m-banking focus from earlier this week, two more developments which caught my eye and this time in developed markets.
The first was an investment of $100 million in cMoney, a Houston based mobile technology firm by AGS Capital Group Essentially the service allows money transfer as well as payment for goods and services via the mobile phone. The firm will be launching their application on the iPhone, Blackberry and Andriod platforms. In March of this year, they had received $15 million from the Kodiak Capital Group. So that’s an investment of $115 million in a company which really doesn’t give much information on its website.
Some of the quirks in the coverage which make me wait for more information. They say:
The company is looking to launch their mobile payment platform for financial services – does that it mean it’s a service that is being launch for financial institutions aka a virtual wallet for particular bank accounts
The application includes patented security technology – more please
They have developed a new and innovative way to send money and pay for goods and services using a cell phone and the text messaging system – hmmmm.....
The second development which caught my eye was AT&T’s tie-up with Apriva that provides mobile payment applications. In fact, they are quite a market leader in mobile payment processing. The interesting bit here is that the application turns smartphones into point-of-sale devices that accept credit and debit cards.
I’ve often felt that the problem with NFC enabled mobile phones is not that they are not wide-spread but rather that the readers are not wide-spread (yes - i am aware that this sentence would never have got past my english teachers in school with its deluge of negations!). After all, who will take on the onus of distribution of the readers – the bank or the operator? So now there may be a way around the dilemma.
There’s much more to the company – it is totally worth a dekho.
An interesting report from Companies and Markets released earlier this month on the mobile payment market. According to the report, the market for mobile payment is forecast at $265 million by 2015.
A significant driver has been the growth of mobile money transfer facilities particularly in Asia-Pacific markets such as Philippines. Another driver is the NFC trials being undertaken and promoted by financial services firms and operators.
This drives home the fact that the growth for mobile money or mobile payments is not coming from the mobile banking facilities which are being initiated by banks in developed markets. Rather the growth is coming from mobile P2P transfers, remittances, transfers in markets as geographically diverse as APAC, LATAM and Africa.
And why? To put things in perspective, there are 4 billion mobile subscribers world-wide whereas there are only 1.6 billion bank accounts approximately. A clear indication that there is a huge segment of people who get their first access to financial services via their mobile handset rather than from a bank!
For this segment, mobile SMS is the most significant mobile payment channel.
NFC is gradually developing. A study from IMS research had forecast NFC IC shipments of 785 million in 2015.
My feeling is the development of the NFC market will finally drive the mobile payment market in developed markets – whether it is mobile payment services that include transport passes, mobile wallets, coupons, price comparison, bill payment services – and the list goes on.
In fact the market seems to be preparing and driving in this direction as well. After the long delayed arrival of NFC, there is a host of M&A activities in this space as well – Broadcom acquired Innovision earlier this month, Inside Contactless acquired the smart card division of Atmel, Gemalto has been ramping up activities.
The recession may slow down the pick-up of mobile payment services once again but the geographical and economic diversification of the addressed markets will ensure that the overall growth continues.
Cisco joined the gang this week with the launch of their tablet – the Cius. In essence it is an Android tablet but the marketing hype positions it as a business oriented tablet focused on high performance unified communication.
Their key focus areas are:
Anytime anywhere mobility – Wifi, 3G and talk of 4G as well
HD Video – 720p at 30 frames per second
Virtualisation – Desktop integration
Collaboration – Presence, IM, Webex
Android OS – emphasis on open platform
The ubiquitious ‘user driven’ – in effect cloud based contacts and other information
I think it’s a great move – an enterprise tablet integrated with Cisco tools riding on the Cisco distribution network should soon penetrate the corporate landscape.
My doubts were more related to – why do it themselves rather than as a partnership?
If not for the open platform, a Blackberry – Cisco tablet would have perfectly fit the bill. It’s a more business oriented platform with the integrated security element. Besides, the Blackberry server is already integrated with the Cisco unified communications manager. Can’t help but wonder what card RIM is going to play in positioning itself against Cisco. Price seems the obvious choice. Their app world may have been another competitive advantage but there they are facing the brunt of Apple and Android. Frankly RIM might as well start tempting app developers with 80-90% revenue share. After all, even 10% of a growing app revenue pool may be better than 30% of the current pool.
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