Mobile - Exciting Possibilities in the Space
The dominance of mobile is no longer an unknown as smartphones reach levels close to saturation in developed markets such as US with 72% and UK (insert Brexit joke) with 68% penetration. Companies like Facebook and Google have made billions by anticipating the transition to mobile and positioning their platforms as the best way for advertisers to reach consumers. In this post, I would like to talk about future possibilities that I think are particularly exciting. I believe that emerging market users, messaging, AI, SMS commerce, and everyday solutions are going to be the next trends to dominate mobile.
Why are emerging markets so important to the future of mobile. While developed markets are nearing close to smartphone saturation, emerging markets are just experiencing a burgeoning middle class that finally has some disposable income. In the meantime, technology has developed rapidly bringing down the costs of many Android phones. Even Apple is releasing a “cheaper” iPhone SE. Because of the lower costs and high computing power of these mobile devices, emerging market users are coming online through mobile devices first rather than desktops or laptops. These users are jumping ahead on the tech curve and happen to total over 3 billion. The majority of these users utilize prepaid plans so that they know exactly how much they are spending on data/minutes/text each time. The startup ecosystem being created from this opportunity is huge. There are startups targeting financing of smartphones for lower income individuals, helping to finance prepaid plans, and creating alternative credit scores using users’ mobile payment data/contact demographics/Facebook profiles, etc.
Free messaging services are adopted quickly in emerging markets to help control costs (many consumers can’t afford to pay up for the new iPhone so iMessaging is not that prevalent). Facebook messenger and Whatsapp have attracted many users in these countries and this presents a unique opportunity. While in the developed markets there is an overabundance of capital funding the development of a variety of apps, in emerging markets there is an opportunity to create highly valuable apps with less competition. WeChat is a great example of this in China. WeChat used messaging as a means to attract a large user base and then added social media, payments, gaming, and e-commerce all into one platform. This presents a unique opportunity for startups to learn user preferences and create valuable apps to either eventually augment an existing platform or create a new one.
While messaging is the connectivity layer for mobile, AI could be the next major use case. Mobile has a much different use case than desktops. For example, most of mobile searches are transactional in nature, you are looking for a nearby shop, restaurant, club, etc. Right now you can use Google search to find a few options or you can use Yelp. To solve this issue of fragmented apps and incomplete info, many startups are working on Chatbots (such as Facebook M) that are essentially AI that you message/talk to directly to help you find what you need and perform tasks. Eventually, AI will act as agents that scan your messages with friends and recommend options based on learning your preferences. Facebook Messenger already does this by recommending you to call an uber if you message your friend saying you’ll be there in a few. Solving the transactional nature of mobile search and helping users increase productivity by offering services based on messaging context will be a huge step forward for mobile. AI seems to be the best way to tackle this problem.
Tied in with messaging is the possibility of the rise of SMS commerce. Since users are constantly checking their phones, text messages are the best way to keep in touch with your customers. Companies have to walk a line between intruding in their customers’ lives and enticing them to shop. SMS commerce is attractive for many reasons: open rates are phenomenal compared to most other mediums, SMS can span non-smartphones as well, customer experience is better as your customer support team can respond instantaneously to an attentive customer. Startups that can help companies better reach customers through a non-invasive way utilizing SMS could become a meaningful player in the commerce space.
Finally, there can be a mobile-first solution for everyday problems. Banking is a great example. While large banks have made meaningful steps to create apps that help with checking account balances and depositing checks, there is still a lag in getting other meaningful banking services such as loans. Many fintech startups are attacking this field by offering clean UI mobile solutions. Everything from insurance, investing, shopping, etc. can be augmented with a great mobile product as customers are more willing to purchase goods if there is greater convenience. You cannot put a price on increasing productivity and giving a customer more time to do things that he/she loves.
