in Considerations, Mobile Phones, Services

The Mobile Phone Services Ecosystem

I came through a short, but interesting, post from Simon Judge over at Mobile Phone Development.

Simon makes a very good point. When you have a brilliant idea for a mobile service you may find yourself engaging so many partners asking for slices of the pie that makes the whole service not appealing for each of the single partner on the venture.

I think that is absolutely true and, at the very same time, it is something that you cannot easily avoid.

Actually the mobile phone services ecosystem is, as of today, working like Simon describes.

We can try to make a simple example. Let’s imagine that we decide to launch the best of breed music application allowing our future customers to listen to music and purchase or music from a dedicated application sitting on my mobile phones.

On the right side of the ecosystem I will have to live in I will found the content owners, the music Major. Selling this content, even in digital format, is their core business and it is quite clear you will have to pay for that content. That cost is going to be one of the major costs you will have to cover with your budget and it is going to be a recurring cost as you go with your services. This is a huge slice of the pie.

Then you have in your mind the best music application ever designed. You need someone to develop and test it on a variety of mobile phones, possibly with different technologies since you want to address the majority of your customer base. You need customers in order to make the business plan profitable. This is going to be a cost too and it may greatly vary depending on the number of platforms you are going to address. In some way this can be considered a fixed cost and a small slice of the pie.

Since we want to offer to our customers the best music on the planet we will need to reach an agreement with different labels and we need to aggregate their content in the same place in order to allow our service to scale smoothly as our customer base increase over time. Aggreation, publishing and hosting is another element of the ecosystem and it costs money. Another slice of the pie.

We are almost at the end of the chain in this ecosystem. We have to market and deliver the service in the proper way. Communication to end users is critical for this be a success but this obviously mean that money goes out of your pocket and slims down the size of the pie.

And, finally, we have the customer who is going to cook the pie for us or, in other words, give his money to us for the service we have designed.

Different products and services may vary slightly but this is a very common approach in the mobile world.

As Simon has written there are a lot of actors involved in this and everyone wants a slice of the pie, even a small one.

It is true that you need to be very careful to seize the size of your slice of the pie but, at the end of the day, the pie is there and you may want to cook a number of different pies in order to eat enough to survive.

Unfortunately you cannot be the only player while delivering your fantastic idea to the market. At least the operator will be always there. So in your venture you will be always partnering at least with another hungry guy.

Anyway Simon has made a very good point with his post!

Write a Comment

Comment

    Webmentions

  1. hot-iphones

    Neilwrote an interesting post today on Here’s a quick excerpt Let’s imagine that we decide to launch the best of breed music application allowing our future customers to listen to music and purchase or music from a dedicated application sitting on my