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Today's Wireless Environment, Tomorrow's Bookings

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Presentation made in 2002 by Leon Benjamin of DestiCorp at the Berlin Eye for Travel event. …

Presentation made in 2002 by Leon Benjamin of DestiCorp at the Berlin Eye for Travel event.
Outlines the key change forces in mobile - most of which are still relevant today

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  • 1. Today’s wireless investment, tomorrow’s bookings? Winning by Sharing Leon Benjamin, Co-founder, DestiCorp Ltd [email_address] – May 2002
  • 2. Introduction
    • Leon Benjamin, co-founded DestiCorp with Anna Pollock in 2001
    • DestiCorp is
      • A “thinking” consultancy, that develops innovative concepts, models and applications for the travel and tourism industry
      • Pragmatists and practitioners who guide our clients through the turbulent waters of change and dislocation with clarity and concrete action
    • Our ‘mantra’ is “Winning by Sharing”
    Leon Benjamin: leon@desticorp.com – May 2002
  • 3. Objectives
    • Provide insight into wireless activity in Europe and how it is reconfiguring traditional business
    • Describe the prevalent and emerging distribution and revenue models
    • Discuss how tourism providers can exploit the wireless space
    • ……… ..and why this can only be achieved by a profound shift in thinking
    Leon Benjamin: leon@desticorp.com – May 2002
  • 4. Presentation Structure
    • Profile the technology landscape trends
      • Convergence
      • Location-based services
      • Wi-Fi
    • Assess the business landscape
      • Market dynamics
      • New business models
    • Describe the key components of a wireless distribution strategy
      • Connectivity, Community, Content and Commerce
      • Winning by sharing
    Leon Benjamin: leon@desticorp.com – May 2002
  • 5. Technology Landscape
    • The European mobile phone statistics make attractive reading
      • 40-75% penetration of mobile phones (Italy & Finland, Iceland now officially the highest with 76%)
      • 76 mobile operators in Europe (10 major’s dominate)
      • 100% penetration in Western Europe by 2006 (Pyramid Research) – that’s 350m people!
      • 178 countries now have GSM
      • Globally, 167m new subscribers in last 12 months
    • Strong uptake of GPRS (always on) services
      • 13% of all mobile phone users in the Western Europe (that’s 40 million) will be using GPRS mobile data services by the end of 2003 (Source: Analysys)
      • By the end of 2003, however, non-commercial users could outnumber enterprise users, accounting for 80% of GPRS users
    Leon Benjamin: leon@desticorp.com – May 2002
  • 6. Technology Landscape
    • SMS is still the dominant (data) revenue generator for operators
      • 10% of total service revenues
      • Billions of text messages every month – Global Q1 2002 75bn, projected total for 2002 360bn
      • In Europe, 90% of these messages are person-to-person with only 10% machine or application to person
    • Instant Messaging (IM) is the ‘next big thing’ and cannot be ignored.
      • 1 in 6 mobile users in Europe currently using IM
      • 50 million users worldwide
      • Exploding into the corporate world (100,000 IBMers sending over 1m messages a day)
    • GPRS and a new standard called Session Initiation Protocol (SIP) will bring about ‘SMS size’ revenue for operators
      • SIP ties together email, voice, and messaging
      • Enables SMS-IM and IM-SMS chat over wireless networks
    Leon Benjamin: leon@desticorp.com – May 2002
  • 7. Market Drivers
    • What do we as consumers want and need?
      • We’re information dependent, especially so for travel consumers
      • We’re task oriented
        • Choosing a destination
        • Finding a hotel
        • Booking a flight
        • Listening to the news or our favourite music
        • Keeping contact with home or office
      • Increasingly, we’re multi-tasking
      • We don’t sit still
    Leon Benjamin: leon@desticorp.com – May 2002
  • 8. Market Drivers
    • Consumers are increasingly mobile
    • Need to cut the physical ties that bind them to home or office
    • Shouldn’t need a check list an arm’s length before leaving home or office:
      • Have I diverted my home phone number?
      • Is the answering machine on?
      • Have I packed my modem cable?
      • What’s the access code for my ISP dial-up?
      • Have I synchronised my address book?
    • I shouldn’t need to carry a sackful of appliances
      • My computer and work-related files
      • A PDA for contacts and to do lists
      • A stereo, music player
      • Mobile phone
    Leon Benjamin: leon@desticorp.com – May 2002
  • 9. Market Drivers have created….
    • 1. The convergence of appliances
      • Computer, phone, MP3 player, billing device, browser
    • 2. Location-based services
    • Relevant information, when and where we want it and determined by our location
    • 3. Always on – everywhere – and FAST(!) connectivity
    • 4. Now we’ll make conscious choices about connecting, soon it will be unconscious, pervasive
    • Ambient connectivity
    Leon Benjamin: leon@desticorp.com – May 2002
  • 10. 1. Convergence
    • Devices are converging and morphing into wireless and voice enabled Personal Digital Assistants (PDAs)
    • Palm still dominant with 47% global market share
      • Microsoft Pocket PC based devices second behind Palm in Europe….and gaining – Compaq iPaq, HP Jornada
    • eTForecasts in its report "Worldwide PDA Markets", expects explosive growth in the form of PDA-phones, a Web cell phone with PDA functionality or vice versa
    • Worldwide PDA sales to jump from 12 million devices in 2000 to more than 61 million in 2007
    • They will be multifunction devices with built-in Internet access, digital camera, music player, scanner and other functionality
    • The hardware capabilities of a typical 2007 PDA will be similar to a 2001 low-end PC!
    Leon Benjamin: leon@desticorp.com – May 2002
  • 11. Convergent Devices Leon Benjamin: leon@desticorp.com – May 2002 Siemens Java PDA phone MMO2 (Cellnet) XDA Pocket PC PDA phone Handspring Treo PDA phone Palm OS Personal Trusted Devices (PTD)
  • 12. 2. Location Based Services
    • A person’s location sets the context for service delivery
      • Be relevant
      • Information and services should be Pulled not Pushed!
    • Online business directories and destination databases are ineffective without geo-coded data (Scoot, Yell, D&B)
    • There is a massive focus on Location Based Services (LBS)
      • Network operators (huge future revenue)
      • Galileo GPS
      • Webraska, Schlumberger
    • Geo-coding service providers
      • Whereonearth.com (UK) can geo-code data to virtually every city in the world (including Jakarta)
      • TerraSeek.com in the US
    Leon Benjamin: leon@desticorp.com – May 2002
  • 13. 3. Continuous, Ubiquitous & FAST!
    • Wi-Fi (Wide Fidelity) networks, or WLANs have literally exploded and emerged as the single most significant development in wireless technology
    • Wi-Fi networks are short range (100m) wireless LANs running at 10mbps
    • They enable laptops & PDA’s to connect to the internet by sharing a broadband connection
    • Cost 300-500 Euros to implement
    • Disruptive technology
      • Cheap
      • Effective, useful
      • Out of control
      • Could severely impede the European investment in 3G
    • Let’s see why
    Leon Benjamin: leon@desticorp.com – May 2002
  • 14. Wi-Fi - Travel Example Leon Benjamin: leon@desticorp.com – May 2002
  • 15. More on Wi-Fi
    • Retailers are creating ‘Hotspots’
      • Most MacDonalds restaurants in the US by end 2002
      • Starbucks deploying across Europe, 462 stores enabled in US
      • BT to create hundreds of Hotspots in an around London
      • BT are rolling out 5,000 broadband subscribers every week
    • Internet access available via Hotspots anywhere in Cambridge (UK)
    • First internet ‘bench’ in small market town of Bury St Edmunds (UK)
    • Available on Brighton beach this summer
    • In travel:
      • Copenhagen Airport is opening its wireless local area network (WLAN) to the public this week. Named CPH-WIZ, Oct 2001
      • Federal Aviation Administration (FAA) to provide secure, broadband wireless connectivity between FAA buildings at airports across the US
      • VARIG Airlines – email, web access on entire fleet, Nov 2001
      • Hilton Group to deploy worldwide
      • Most airports will be provide Wi-Fi access within next 12 months
    Leon Benjamin: leon@desticorp.com – May 2002
  • 16. More on Wi-Fi
    • Most of Hawaii is now ‘wired’ with Wi-Fi
      • “ Island of wireless guerrillas”
    • Individuals are (re)-charging their neighbours to share their broadband
    • Companies like Joltage.com and Boingo.com are providing a payment and global publishing platform to enable the contractual elements
    • Anyone can become an ISP serving small local communities
    • Giving rise to Network Area Neighbourhoods (NANs) and Customer Owned Networks (CONs?)
    • In the US the FCC will soon sanction next generation Wi-Fi that will operate at higher speeds and greater distances (miles)
    Leon Benjamin: leon@desticorp.com – May 2002
  • 17. Wi-Fi and the Gaming Sector
    • Sony built a virtual reality gaming facility off the coast of San Diego in 1999 - Norrath
    • Can accommodate 1m visitors per year
    • Gamers can participate using their PCs at home but need a broadband connection so Wi-Fi being used from remote areas
    • Wi-Fi took this game from relative obscurity to 100,000 online at any given moment in time
    • Sony derives $3.6m revenue per month from this community
    • Norrath’s per capita income is roughly between Russia and Bulgaria
    • Put another way, the 77th richest country in the world
    Leon Benjamin: leon@desticorp.com – May 2002
  • 18. Wi-Fi and Conferences
    • Conference Facilities will be equipped with Wi-Fi
    • Attendees will be able to:
      • Listen,
      • Publish web logs in real time to share their responses with the world;
      • send pictures, instant transcripts,
      • field questions from non-attendees
      • Research veracity of speakers’ statement
      • Make e-appointments for F2F meetings with fellow delegates
    • Conference as community (an event pulsating in time and space) involving a web of relationships
    Leon Benjamin: leon@desticorp.com – May 2002
  • 19. Technology Landscape - Conclusions
    • There is massive “liquidity” in the wireless space
      • Users, devices, services, coverage
    • Location and context is everything
    • Our entire surroundings are the interface to the network
      • Where the TV turns itself down when our phone rings!
    • The creation of a wireless “Digital Canopy” – Wi-Fi, GSM, Internet, Bluetooth
    • There is a steep learning curve for any tourism or travel provider – and it’s changing all the time
    • The emergence of standards and intermediaries (distribution brokers) will enable tourism providers to concentrate on their core competency and content
    Leon Benjamin: leon@desticorp.com – May 2002
  • 20. Current Business Activity
    • Confusing, very dynamic and fluid!
    • Market activity comprises
      • Mobile technology platform providers
      • Mobile portals – network operators
      • Point solutions deployed by large corporates and travel organisations
      • Payment/ billing solutions
    Leon Benjamin: leon@desticorp.com – May 2002
  • 21. Technology Providers
    • Infrastructure provided by the ‘usual suspects’
      • Nokia, Ericsson, Motorola
    • Gateway products that deliver content, applications, provisioning
      • OpenWave, Phone.com, Aether Systems, Passcall, Airflash, Brience
    • Air2Web platform used by Best Western
      • Customer self-service solutions
      • eCRM
    • Autodesk Location Services has announced a location-enabled Short Messaging Service and MMS (Multi Media Messaging) solution
      • Short command for retrieving hotel options based on location. With a suitable PDA/phone, a traveler would be able to view photographs of the hotel's facilities.
    Leon Benjamin: leon@desticorp.com – May 2002
  • 22. Mobile Portals
    • Every operator has one!
      • Vizzavi (Vodafone & Vivendi), O 2 (BT Genie), Telia, Sonera, MobilStar, T-Plus, DT
    • Every major web portal has one!
      • MSN, AOL, Yahoo, Tiscali
    • Lots of ‘pure play’ portals and ASPs
      • AvantGo, Breathe, Room33, Aspective
    • The manufacturers are in on the act too
      • Nokia Club – a community portal
      • Sony Ericsson
    Leon Benjamin: leon@desticorp.com – May 2002
  • 23. Mobile Portals
    • They have common features
      • Content – news, stocks, weather, music, etc
      • Logos and ring tones
    • These mobile portals are not really making money
      • Content is largely free
      • SMS is mostly person-to-person
      • Cannot live by advertising, ring tones and logos alone
      • Vizzavi has now invested around £1 billion, revenues from services are in the low millions (£1-3m)
    • The core revenue model is based around sharing traffic revenues generated by end user ‘pull’ of content
      • Very successful for NTT DoCoMo (iMode)
    Leon Benjamin: leon@desticorp.com – May 2002
  • 24. Point Solutions – Content providers
    • Corporate Solutions
      • United Airlines EasyUpdate feature offers Mileage Plus passengers latest travel information via the Web, a wireless device, or telephone, at any point on their journey
      • CabinLINK, an in-flight, e-mail and Internet browsing service for corporate and private airline passengers, Tenzing collaborating with Singapore Airlines and Air Canada
      • BA check in services (WAP)
      • Variety of wireless based eTicketing
        • UK, Odeon WAP booking service
        • UK, Hull City Council collaborating with Ericsson to deploy first mobile car parking payment scheme
    • Smaller travel/tourism related service providers
      • Kizoom – for UK rail timetable
      • 0800taxi.com – UK taxi cab firm database (WAP/SMS)
    Leon Benjamin: leon@desticorp.com – May 2002
  • 25. Payment Models
    • Frost & Sullivan prediction: Electronic commerce conducted via mobile devices such as phones and PDAs will take off over the next few years to become a US$25 billion market worldwide by 2006. M-commerce will account for 15 percent of the world's online commerce in sectors including;
      • automated point-of-sale payments (vending machines, parking meters and ticket machines)
      • attended point-of-sale payments (shop counters, taxis)
      • mobile-assisted Internet payments (fixed Internet sites using phone instead of credit card) – Reverse Billing
      • peer-to-peer payments between individuals
    Leon Benjamin: leon@desticorp.com – May 2002
  • 26. Payment Models
    • Micropayment applications are key and there is huge activity in this area
      • Reverse billing: Jupiter predicts that by 2006 consumers will spend 3.3bn Euros using mobiles as a content billing platform
      • Nochex & Payhound (email money)
      • Paypal, Compaq’s Millicent
      • BT Microbilling – services on your blue bill
      • Vodafone mobile wallet (macropayment solution)
      • Freedompay, Nokia & MacDonalds in the US – “burgers by cell phone”
      • Egold.com, Goldmoney.com
    • Pre-pay or post-pay? Subscription or pay-as-use?
      • Business plan to provide offer both methods
    Leon Benjamin: leon@desticorp.com – May 2002
  • 27. Wireless Distribution Strategy
    • So how does a tourism provider exploit the wireless channel?
    • How do you enrich the customer experience?
    • What are the key steps to get there?
    • How do you reduce transaction costs?
    • How do you minimise the risk of failure?
    Leon Benjamin: leon@desticorp.com – May 2002
  • 28. Wireless Distribution Strategy
    • Shift Your Thinking, Change Your Perspective from:
    • Enterprise to Business Web
    • Product to Customer
    • Competition to Collaboration
    • Push to Pull
    • Controlling to Enabling
    Leon Benjamin: leon@desticorp.com – May 2002
  • 29. Destination Web
    • A Destination Web © is an electronically inter-connected community of autonomous but interdependent, travel-related enterprises that collaborate in order to provide value to visitors, profit for providers and partners and benefits to the host community. DestiCorp
    Leon Benjamin: leon@desticorp.com – May 2002
  • 30. Listening to the Customer (Cluetrain)
    • Markets consist of conversations
    • “ A powerful global conversation has begun. Through the Internet, people are discovering and inventing new ways to share relevant knowledge with blinding speed. As a direct result, markets are getting smarter—and getting smarter faster than most companies”
    • People in networked markets have figured out that they get far better information and support from one another than from vendors
    • Companies that don’t realise their markets are now networked person-to-person, getting smarter as a result and are deeply joined in conversation are missing an opportunity
    Leon Benjamin: leon@desticorp.com – May 2002
  • 31. Communities that Converse
    • Why create these communities? They are being taken seriously outside travel
    • Hallmark cards created a ‘listening’ community to understand how its customers celebrate Valentine’s and discovered a chasm between the fantasy they sell in their cards and what people really do
      • “ revolutionize our understanding of how people learn and how market research should be conducted”
      • Hallmark is reducing the risk of getting it wrong by asking its customers what they want – this is helping it triple sales over the next 5 years
    • Proctor & Gamble with PG.com also created a listening platform that
        • captures better insights faster
        • builds advocates for our products
        • provides feedback that contains “disproportionately rich ideas”
    • There are many thousands of these communities with a vast array of interests and subject areas
      • Travel with Kids.com
      • Sift with Travelmole.com & Ebay.com
      • Hermail.com
    Leon Benjamin: leon@desticorp.com – May 2002
  • 32. Put the Customer at the centre Leon Benjamin: leon@desticorp.com – May 2002
    • Pull Vs Push
    • Now your customer is able to pull an experience toward him/her
    • At the right time, location and context
    • Enabled by an interconnected Digital Canopy
    • We call it Winning by Sharing
  • 33. The Destination as Community
    • DestiCorp believes that Destinations are in the best position to create these communities
      • Closest to the providers and the guests
      • Local knowledge & Relationship Capital
    • But they lack the skills and knowledge to implement them
    • A Destination based community should be a place where a guest can interact, before, during and after their trip
      • What’s happening here? Cool events? Good deals?
      • What have people said about this location and its services?
      • Who’s coming? Do they share my interests? What’s their IM address?
      • Can I share my experiences (blog)?
    • Create the conditions for emergent behaviour
      • “ You want us to pay? We want you to pay attention”
    Leon Benjamin: leon@desticorp.com – May 2002
  • 34. Five Essential Ingredients
    • Customers
        • Who are they; what task are they trying to complete?
    • Content
        • How can we deliver the content they need, when, where and how that’s relevant and convenient?
    • Community
        • What other providers and providers do I need to work with to satisfy my guests’ needs?
    • Commerce
        • How do I make the transaction profitable for all parties?
    • Connectivity
        • How do I make it possible to “converse” via multiple channels, touch points and provide seamless service?
    Leon Benjamin: leon@desticorp.com – May 2002
  • 35. Concluding Observations
    • This is a big, complex, very fast moving space!
    • It will be impossible to absorb and understand all of it – and you don’t need to!
    • Far more important will be your ability to collaborate
      • Internally in order to innovate
      • Externally in order to get the most from partners
    • Your focus on the customer
    • This will be about ‘plug-and-play’ business
    • Wireless is an important channel – but not the only channel
    Leon Benjamin: leon@desticorp.com – May 2002
  • 36. Final Thoughts
    • How do you compete in a world of perfect information?
      • Not by price but by perceived value
      • Through an obsession with the customer
      • By focusing on core competencies
      • Through collaboration
      • By building trust & reputation
    • Today’s wireless investment, tomorrow’s bookings?
      • Yes, but it’s a journey not an event
    • Successful internet businesses will be those that hunt in packs
    Leon Benjamin: leon@desticorp.com – May 2002
  • 37. Destizone.com
    • Global electronic community of industry leaders and thinking professionals
    • A gateway to further knowledge providing members with easy access to articles, books, reviews, discussion, experts
    • Engaged in all facets of the tourism industry willing to question, to learn, to share knowledge
    Leon Benjamin: leon@desticorp.com – May 2002
  • 38. Thank You Leon Benjamin: leon@desticorp.com – May 2002 Leon Benjamin, Co-founder, DestiCorp Ltd

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