Capture the Connected Device Opportunity


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Capture the Connected Device Opportunity

  1. 1. S T R A T E G I C W H I T E P A P E R While connected devices and their apps are rapidly gaining popularity, they don’t fully enable the mobile, multimedia and social lifestyle that people want. Instead of today’s fractured and frustrating experience, people need intuitive, personalized and integrated apps and services for their netbooks, e-books, tablets and other connected devices. Service providers can capitalize on their high-value network capabilities to become expe- rience providers, using intuitive apps and services to enable the lifestyle people want and to bridge the gaps in today’s connected device experience. With this approach and the right partner, they will be well positioned to capture the connected device opportunity and increase revenue. Capture the Connected Device Opportunity Profit from the power of intuitive apps and services
  2. 2. Table of contents 1 Capitalize on network capabilities 1 Understand the quest for connection 2 Give people intuitive apps and services 4 Bridge the gaps in the connected device experience 4 Make it easy and engaging 5 Make it seamless and simple 6 Make it relevant and rewarding 7 Find the right partner 8 Abbreviations 8 Resources
  3. 3. Capture the Connected Device Opportunity | Strategic White Paper 1 Capitalize on network capabilities As people race to embrace connected devices ranging from netbooks to e-books, tablets to toys, their enthusiasm for a more connected lifestyle at home, at work and on-the-go becomes more obvi- ous. The numbers tell the story: According to global research and consulting firm, Strategy Analyt- ics, by 2014, we can expect to live in a world with more than 1.7 billion connected mobile devices1 . But will these connected devices enable the mobile, multimedia and social lifestyle that people want — and are willing to pay for? More devices alone will not. When Apple® reported it sold 300,000 iPads the first day it was available in the US, the company also noted that more than one million iPad™ applications and more than 250,000 iBooks™ were downloaded the same day2 . It’s the iPad’s large, multi-touch screen that makes its applications so appealing and intuitive. And it’s the experience delivered by the combination of connected device and apps that changes the way people integrate the device into their daily life. Consider iBooks and online publications, such as Wired Magazine3 : Content is rich and vivid, turning a page is a hand motion, not a key click, and ads are interactive, emotionally engaging and full-screen. But it will take more than the connected device and its apps to fully enable the mobile, multimedia and social lifestyle people want. It will take the service provider’s high-value network capabilities. And therein lays the connected device opportunity for service providers. By capitalizing on their high-value network capabilities, service providers can become experience providers, using intuitive apps and services to enable the lifestyle people want and to bridge the gaps in today’s connected device experience. Think about visual voice mail. It’s the combination of the touch screen and the message that delivers the highly intuitive experience that improves people’s work and life productivity. And the message relies on the service provider’s high-value network capabilities. Before we explore the specifics of how intuitive, network-powered apps and services will help service providers capture the connected device opportunity, it’s important to understand the quest for con- nection and the challenges people face today. Understand the quest for connection Today, people want to stay in touch with the people and the brands they care about all the time and from any location. Many have multiple mobile devices and communicate using text messages, instant messages and social networking sites. Despite all of the evolution that has taken place, people still struggle with non-intuitive, non-per- sonalized and non-integrated apps and services. It’s complex and cumbersome. And it’s productivity- affecting for the rapidly-growing mobile workforce that relies on connected devices to get critical information — patient health updates, meter readings, delivery confirmations — from the field back to the organization. 1 Managing the Traffic Revenue Imbalance: Notebooks, Netbooks Other Connected Devices, Mobile Word Congress presentation, February 2010 2 Early iPad app stats show Apple’s device a hit with gamers Financial Post online, April 8, 2010 blogs/fpposted/archive/2010/04/08/fp-tech-desk-early-ipad-app-stats-show-apple-s-device-a-hit-with-gamers.aspx 3
  4. 4. Capture the Connected Device Opportunity | Strategic White Paper2 According to TNS™ Technology, people crave simplicity in services and the process of searching for, downloading and using services must be intuitive and seamless. People are also looking for simplicity and seamlessness across devices — an experience global market research shows they are willing to pay for. In a 2010 survey of the global youth market, 71 percent of respondents said they would use a multi-screen service; 65 percent would willingly pay for it. In addition, 64 percent of respondents would remain loyal to their current provider if it offered multi-screen services4 . With more connected devices and more involvement by third-party content providers and device manufacturers, the customer service experience is becoming increasingly unsatisfying for consumers and increasingly complicated for service providers to manage. Wait times are growing and all-too-of- ten people contacting their service provider are told they’ll have to contact the device manufacturer or application and content provider (ACP) instead. 43 percent of consumers are prevented from using services through their mobile due to issues associated with ease of use. And 20 percent intend to buy a touch screen device for their next purchase compared to 9 percent for Qwerty devices5 . Yankee Group summarizes the situation this way: “Consumers’ need to be constantly connected only raises the bar higher for communications service providers (CSPs) and their ability to manage the customer experience beyond their traditional network domain. As consumers begin connecting their world, there is less clarity on where to turn for guided advice for troubleshooting issues. Con- sumers will turn to CSPs for everything from data connectivity to application downloads to home automation. Yet today, CSPs cannot ensure the overall customer experience across a converged ecosystem, let alone manage it cost-effectively6 .” To reap the rewards of the connected device boom, it’s time for service providers to take a bigger role in delivering more intuitive apps and services and in improving on today’s fractured and frus- trating experience. Give people intuitive apps and services Service providers are already investing in many of the high-value network capabilities and network- enabling technologies — including 3G HSPA+, end-to-end LTE, IMS and RCS — needed to deliver more intuitive apps and services. These investments put them in a strong position to play both a direct and an indirect role in creating intuitive connected device apps and services: They can incor- porate high-value network capabilities into innovative new apps and services themselves and they can give ACPs secure access to their network enabling technologies. Let’s look at how a one-to-many video sharing service for connected devices will help service providers strengthen their position in the connected device value chain and create new revenue opportunities. Service providers have the opportunity to generate new revenue and increase customer loyalty by launching innovative services and applications such as home surveillance, home security, home auto- mation and e-health monitoring, or by extending their current IPTV services to content, multimedia or entertainment applications7 . 4 Seize the multi-screen opportunity: 5 Global Telecoms Insights - 2010 Priorities, Sam Curtis, TNS Technology 6 Connected Devices Raise Customer Support Complexity, Sheryl Kingstone, Yankee Group, March 2010 7 Connected Devices Raise Customer Support Complexity, Sheryl Kingstone, Yankee Group, March 2010
  5. 5. Capture the Connected Device Opportunity | Strategic White Paper 3 Picture a backpacker video blogging around the world, an archeologist on a dig or a cameraperson on the scene of a fast-breaking story. All of these people need to quickly and easily talk and share video with a number of remote individuals. They — and the organization they work for — will be interested in a service that helps them meet this need. Figure 1. A one-to-many video-sharing service empowers end users and creates new revenue opportunities. RCS / IMS / LTE Getting the story to the newsroom Blogging from around the world Sharing on-site archaeological video remotely With access to an end-to-end LTE mobile network, a converged IMS network and an enhanced net- work address book based on RCS, any of these people can simply click on the right contacts in their address book to set up a real-time voice and streaming video conferencing session with all of their remote participants at once. It doesn’t matter where those participants are located, who their service providers are or what devices they are using. Because the network is standards-based and supports interoperability, it has the intelligence to figure out the location, availability, service interconnec- tion and device specifics for each participant and automatically connect them. Almost instantly, the backpacker is sharing his latest experiences with family and friends, the archeologist is sharing her latest finds with researchers around the world and the cameraperson is sharing footage with editors and writers back in the newsroom. Storing the live-streamed video in the network and using their own and third-party APIs to add context gives service providers additional service and revenue opportunities. For example, they can offer to post videos to a blog or a video-sharing web site or make them available for inclusion in mashups. They can also use presence and location information to “pre-tag” the video content with context information or to add context to notifications, such as SMSs. Imagine the backpacker has just arrived in Sao Paulo, Brazil and sent an SMS. Now aware of his presence and location, friends and family can immediately start chatting and joining video-sharing sessions.
  6. 6. Capture the Connected Device Opportunity | Strategic White Paper4 By securely exposing APIs for their network-enabling technologies to third parties, service providers can further expand their role in the world of apps and services for connected devices and their rev- enue potential. Consider the opportunities when the one-to-many video-sharing service is custom- ized for specific vertical markets and uses, such as: • E-health services for remote patient monitoring • Distance learning services for real-time interactive education experiences • An eyewitness video blogger app for adding text to videos • Digital signage on buses, billboards and buildings for real-time public information, safety and security The list of connected device apps and services that can take advantage of the service provider’s network-enabling technologies is virtually endless. But dealing with growing numbers of devices, apps and services has created other challenges for people. And those challenges have created an- other opportunity for service providers — to bridge the gaps in today’s connected device experience. Bridge the gaps in the connected device experience As the old saying goes, more is not always better. With more connected devices and more apps and services, the gaps between the experience that people want and the experience they have today is actually widening. Consider their perspective: • Why is it so complicated to start using new apps and services on my connected devices? I want an easy and engaging experience so I can start enjoying my apps and services right away. • Why can’t I communicate and watch my favorite shows across all of my connected devices as well as on my mobile phone, computer and TV? I want a seamless and simple experience across all of my screens. • Why do I feel so disconnected, so unknown, so unappreciated even though I have all of these connected devices? I want a relevant and rewarding experience no matter what device or what network I’m using. By using their high-value network capabilities as the basis for apps and services that bridge these gaps, service providers can increase overall customer satisfaction — and revenue. Make it easy and engaging Whether they offer the connected device apps and services themselves or have relationships with ACPs, service providers need to deliver an easy and engaging experience throughout the offer, acti- vation, support and maintenance life cycle. With this approach, they can dramatically simplify the end-to-end connected device experience and, at the same time, extend and strengthen their trusted relationships with their customers. An automated and efficient experience from all customer front doors — online, retail and contact center — lets people quickly start enjoying their connected device apps and services. And it gives them a personalized, single-point-of-contact customer service experience. Based on their service transaction history and data in the network, people can easily discover apps and services that are centered around what they want. And they can feel comfortable knowing their trusted service provider has a history of following best practices for respecting their privacy and security.
  7. 7. Capture the Connected Device Opportunity | Strategic White Paper 5 The dynamics of the marketplace are changing. Yesterday we competed on price. Today we compete on the differences in the services. But tomorrow, when all companies look alike and offer the same kinds of services and pricing, we’ll be competing on the customer experience. – Jeffrey Kagan, Telecom Market Analyst8 Service providers can use the additional customer contact opportunities to proactively make sure customers have the apps and services they want and to reward customers for their loyalty. For ex- ample, they can let customers know when they are approaching the limit of their data plan so they can more accurately manage their usage or supplement their plan. They can also proactively advise customers of service interruptions or degradation and provide them with accurate service return times to manage expectations. These types of approaches, along with automated renewal services and reward programs or discounts, will help service providers increase app and service uptake, loyalty and revenue. Make it seamless and simple As people adopt more and more connected devices, it will become increasingly important for ser- vice providers to deliver a single, seamless viewing experience across all of their screens. The flexible viewing and multi-touch options offered by tablets, netbooks, e-books and other con- nected devices create an opportunity for service providers to differentiate themselves by delivering a multi-screen experience that provides context-sensitive content and conversations across any device or social network. This allows people to choose what they want to watch, when and where, and to pause and resume content and conversations right where they left off across any screen — their connected device, mobile phone, computer or TV. They can also share one “me” across all of their social communities to dramatically simplify how they reach out to people. Service providers are already starting to recognize the value of the multi-screen opportunity. Telefónica® , Spain’s largest communications provider, has started taking advantage of its fixed and mobile assets to deliver a unified experience across large and small screens. While it’s still early days, there have been some positive signs of consumer interest in a multi-screen offering: For example, a significant number of the O2 UK iPhone customer base is taking the Sky TV option. The greatest interest in multi-screen is currently shown by high-end users9 . The trend toward a simplified, multi-screen experience is also catching on in the connected device world. For example, the Amazon Kindle® offers a multi-screen experience through its Whispersync technology which saves and synchronizes the last-page read, bookmarks, notes and highlights across devices — Windows® PC, Mac® , iPhone® , iPad and BlackBerry® . 8 As quoted on 9 Telefonica: multi-screen strategy, Michele Mackenzie and Jonathan Doran, Ovum, April 12, 2010
  8. 8. Capture the Connected Device Opportunity | Strategic White Paper6 In these cases, service providers can use their high-value network capabilities to extend and en- hance the multi-screen experience. Picture Kindle customers in a coffee shop, using an app that includes the service provider’s wireless network roaming and location-based services to take part in a spontaneous book club experience with other patrons. Make it relevant and rewarding Along with delivering an easy and engaging experience to increase loyalty to their own brand, ser- vice providers can help ACPs deliver a relevant and rewarding experience that will increase loyalty to the ACP’s brand. It’s a revenue-sharing opportunity: The stickier people are to the ACP, the more revenue for the service provider and the ACP. Customized Interactive Voice Response (IVR) systems, interactive advertising and convergent pay- ment are examples of service provider capabilities that will be very appealing to ACPs who typically don’t have the experience, expertise or infrastructure needed for such capabilities. They will also appeal to customers who crave simplicity and have a long history of working with their trusted service provider. For example, service providers can: • Use their subscriber intelligence and IVR systems to link people directly to the ACP’s support center and ensure the customer service representative (CSR) knows why the customer is calling before they make contact. • Use their subscriber intelligence, presence, location and convergent payment assets to create relevant, compelling and interactive advertising that will encourage people to click through ads. • Use their convergent payment assets to add ACP purchases to the customer’s service provider bill and allow them to monitor their usage and spending in real time. They can also use this data to run reward programs on behalf of ACPs or provide the data to ACPs for their own reward programs. As shown in the convergent payment example, service providers can have a direct or an indirect relationship with the ACP’s customers. The right approach will depend on the service provider’s business objectives and market. For ATT™, offering behind-the-scenes capabilities for Amazon’s Kindle is the right approach. “People know who the carrier is behind it [Kindle], but I’m comfortable being kind of invisible in that kind of relationship. The key to this space is flexibility.” – Glenn Lurie, head of the connected device opportunity at ATT10 No matter which approach they choose, the key for service providers looking to capture the connected device opportunity will be to work with a partner who can help them leverage both their high-value network capabilities and relationships with third-party ACPs to become experience providers. 10 Xchange online at
  9. 9. Capture the Connected Device Opportunity | Strategic White Paper 7 Find the right partner The right partner to help service providers capture the connected device opportunity understands service providers’ business, their technologies and their operations and can deliver the solutions and products needed to enable the mobile, multimedia and social lifestyle that people want. Alcatel-Lucent is that partner. Through our deep understanding of application enablement, an in- dustry vision and network approach that combines the trusted capabilities of service providers with the speed and innovation of the Web, Alcatel-Lucent can help service providers deliver what people and enterprises want: A richer and more trusted Web experience and more. A High Leverage Network™ architecture forms the foundation for application enablement. It incor- porates technologies, such as end-to-end LTE and IMS, to simultaneously enable efficient, low-cost bit transport and innovative, revenue-generating services. Alcatel-Lucent also offers a cloud-based global developer platform and developer program that helps service providers extend their reach to the global development community. The platform includes a set of developer tools, a virtual sandbox and application distribution capabilities that address the entire developer life cycle and support service providers and enterprises with an end-to-end API and application solution. The developer platform builds on the Alcatel-Lucent Application Exposure Suite (AES), which allows service providers to make key network capabilities, such as billing, location and network op- timization, available to ACPs through a secure “exposure layer”. As an active participant in industry ecosystems, such as the ng Connect Program, Alcatel-Lucent understands the value proposition and shared-revenue opportunities that can be realized by pooling the resources of global leaders in infrastructure, devices, applications and content. In addition, our applications portfolio is strategically aligned around the building blocks required to build intuitive connected device apps and services that fit the mobile, multimedia and social lifestyle. With these solutions and products, service providers can: • Effectively connect brands, media and application developers • Easily create social collaboration and communications tools • Efficiently transform network usage and traffic into real-time revenue • Successfully extract full value from their 360-degree view of subscriber intelligence • Significantly enhance the customer experience throughout the offer, activation, support and maintenance life cycle A comprehensive set of professional services ensures service providers have a partner that can support them every step of the way.
  10. 10. Capture the Connected Device Opportunity | Strategic White Paper8 Abbreviations 3G third generation ACP application and content provider AES Application Exposure Suite API application programming interface CSP communications service provider CSR customer service representative HSPA+ Evolved High-Speed Packet Access IMS IP Multimedia Subsystem IPTV Internet Protocol television IVR Interactive Voice Response LTE Long Term Evolution RCS Rich Communication Suite SMS Short Message Service Resources • Application enablement • High Leverage Network • Alcatel-Lucent solutions • Alcatel-Lucent products • ng Connect Program solution concepts
  11. 11. Alcatel, Lucent, Alcatel-Lucent and the Alcatel-Lucent logo are trademarks of Alcatel-Lucent. All other trademarks are the property of their respective owners. The information presented is subject to change without notice. Alcatel-Lucent assumes no responsibility for inaccuracies contained herein. Copyright © 2010 Alcatel-Lucent. All rights reserved. ASG9718100434 (07)