“Sea of connectivity” for the next decade “Sometimes our industry is limited, not by our abilities, but by our vision” Metaphor: an all-communicating world More than technology connectivity Convergence: telecom, mobile internet and media sectors Strategic partnership: deliver value to customers and consumers Impact on society and life (thought leadership)
Going beyond as a company and the industry as a whole Industry: multibillion devices connected to IP networks Ericsson itself: shift in business model
Ericsson’s differentiators Transformation not only in technology but also in business model “Customer centric” value proposition with a dynamic role Navigator Integrator Trusted advisor Innovator Thought leader
Customer-centric value proposition Who’s Ericsson’s customer Telecom operators End-consumers Strategic partnership with operators, alternative players, government and end consumers Due diligence Situational analysis (Geographic, demographic, industry sector, etc.) Potential of penetration Execution guidelines
Align Ericsson’s resources Technology leadership Well-poised in 2010 A global company with local commitment Listen and respond: The shift of business model Fee structure: how to capture value and monetization mechanism Apps
Eco-system: co-create value through new business model Telecom operators Network providers Handset makers Growing social networks
Part Two: Execution Chinese Agriculture Sector
Current Agriculture Information System Developing Slowly In China Agriculture Information system development is a hot issue in China. Computer based agriculture information system is facing difficulties. Demand: - Low education level in rural area. - Limited budget for digital devices. - Diversity of information demand. Supply: - Quality of Information. - Do not have knowledge sharing system.
The Largest Potential Market of Mobile Services Huge market include 1/8 of the whole world population, 2/3 of the families own cell phones. Insufficient demand hamper the following mobile network infrastructure development. Great potential information exchanging demand in agriculture industry.
Integrate information Partner: China Mobile - Widest signal coverage. - Largest user base (70% of the 700million mobile phone users in China). Agriculture Comprehensive Information System (ACIS) Suppliers Information System(fertilizer, seeds & facilities) : 1. Real-Time suppliers market information. 2. Order in advance. (Can be used as a guarantee to apply for small loans) Market Information System: Real-Time marketing information Order in advance. (Can be used as a guarantee to apply for small loans)
Agriculture Information Shop (APP Store) - Prices fluctuation cycle analysis reports. - Agricultural technology materials. - Video study materials for Agricultural skills developing. - Professional Agricultural Applications.
Fee Structure Entry package which charges a very low monthly fee: (Applicants can use agriculture engagement certifications to do the application.) - Basic services and 10Mbps data flow per month what can support the basic use. Basic information services(free for charge): - Basic market information - Basic agriculture technology instruction materials - Free versions of professional agriculture applications
Value-Added Information Services(charges subscription fee and Ericsson can charge commission fees): - Advanced agricultural technology instruction materials. - Detailed market information analysis reports. - Full versions of professional agricultural applications. App Store: All the basic information materials and value-added information materials should be downloaded from the App Store.
Expanded Applications (Entertainment, Education etc.) Agriculture Industry Government Suppliers Customers Research Organizations
Eco-system Demand Hardware Capacity Create Demand to Balance Eco-system
Profit Model In Short Term: Commission fee from China Mobile Government investment & subsidies In Long Run: Expanded Information Services Revenue from value-added services Commission fee From China Mobile Advertisement
Business model change How will the change work? (New revenue, partnership) High level impacts (On Ericsson, local government and China mobile)
BUSINESS MODEL CHANGE Focus on service: Network builder service solution provider Focus on undeveloped market: Traditional telecom industry agriculture in emerging China Focus on information integration: Ecosystem with constant information circulation
HOW WILL THE CHANGE WORK? Potential demand: Undeveloped market A huge group of potential users Ericsson’s competency: Familiarity with China market, Advantage on technology, Brand recognition, Credibility already built (since 1894), …
HIGH LEVEL IMPACTS Mutual benefits on both sides sustainable partnership in long run Enhancement on government relation All results in: Financial gain on both sides Industry awareness of Ericsson