The future of the mobile Internet: Skype's Russ Shaw at CeBIT 2010


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Skype's Russ Shaw spoke at CeBIT in March 2010 about the future of the mobile Internet – best viewed alongside the video here:

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  • We’ve moved from a mainframe-centric world, to a PC-centric world, to a web-centric world, to an app-centric worldAnd the Internet has moved from being a web of connected PCs to a web of connected devices, many of them mobile
  • Mobile devices are no longer really just phones – they’re computers you carry in your pocketThe iPhone epitomises this – it’s a little computer, running an optimised version of Mac OS XAnd it had 8 times as many users as AOL 2 years after launch – devices are important
  • Smartphones are king: 15% of devices in 2008; 38% in 2013 (Informa) — virtually all smartphones by 201543% of the world will have 3G by 2014 (ABI Research)
  • In 2013, mobile will overtake the desktop as the default mode of Internet access (Gartner) – even now, 4.6B mobile subscribers vs. 1.5B PC users
  • If the Internet is now app-centric, the mobile Internet is even more soSoftware will be the driver of both device and data plan purchase, and so the innovation driver for revenue and for next-generation networksThird-party app developers will be critical playersWe’ve already seen this with the incredible success on mobile of apps like Facebook$70B(US) market for mobile consumer revenue in 2014 (ABI Research) – apps are what will drive this
  • Our own apps haven’t done badly eitherOur iPhone app has been downloaded to over 15% of iPhones and iPod touch devices worldwide: 12M to dateBut it’s not just about volume – people who use Skype on their iPhones spend more and stay longer than those who only use Skype on the desktopNow launching to Nokia smartphone users of over 200 million users, via Ovi store
  • Integrated within popular Nokia N900fully integrated into the address bookeasy to make callsBig demand for Skype on 3 in UK – 100m minutes a month
  • As I’ve just shown, Skype lives both on the desktop and on mobileAnd we reach mobile customers via direct downloads, via hardware integrations and via operator integrationsMuch like what we see with Facebook, this backs our view that platform-agnostic apps have the greatest potential – users care more about what an app can do more than how they get itThere is massive untapped demand for users to get on their mobiles the apps they enjoy in a fixed environment
  • At Skype, our vision is to enable the world’s conversationsIt would be easy to think of mobile voice as mimicking or threatening networks, but we’d disagreeBecause voice and video calls between people on Skype are free, we enable a lot of conversations which wouldn’t otherwise have happened – we have created a market which didn’t existAnd Skype on mobile is very much a customer-led proposition – giving people the freedom to take those conversations with them, away from the computerWe think of the whole mobile app space in much the same way – mobile apps give customers the freedom to communicate, shop, watch, listen, organise or play without being tied to a desktop computerIn turn, this allows them to do things they wouldn’t otherwise be able to do – watch movies on their way to work; meet friends who just happen to be in the bar next door, or compare prices while standing at the shop shelf
  • For these new things to catch on, the value proposition must be simple – the examples that I’ve just mentioned are all greatSkype has an equally simple value proposition, and our global ubiquity is testament to thisSkype lives on the desktop, on TVs, on mobiles and many other devices – with ubiquity comes the challenge to create an experience which is seamless and which transcends platforms: experience is critical too
  • I know I've mentioned the iPhone at least twice already, but I’m going to mention it again: great experiences winOnce the value proposition is clear, execution becomes criticalFor mobile apps, this means they have to be easy to download and pay for, trivial to install and set up, reliable, easy and (dare I say it) delightful to use – and there’s got to be a foolproof support system in case things go wrongFor all of these things to happen, software developers, hardware manufacturers and networks must work together
  • Data from 3 in UK shows how apps like Skype can be a valuable acquisition and differentiation tool as well as a way to improve loyalty – compelling proposition which helps customers to switch, particularly in saturated marketsSkype creates a differentiated value proposition – but one which is universal and easy to use, with a clear pricing modelMobile internet services also attract higher value customers willing to pay more than averageVerizon and 3 are the smart movers who are and will reap the benefits
  • The true challenge is to find a business model which works for everyoneA business model which gives consumers access to the most innovative software, on the very best hardware, on the very best networksAnd a business model which allows the very best hardware manufacturers and the very best networks to get access to best-of-breed apps like SkypeAnd a business model which means that all three win
  • Certain conditions will ensure that everyone winsPartnerships of respect – partnerships for mutual benefit of partners and (by bringing better experiences) customersNetwork innovation – and an acknowledgement that this is worth paying forAn open Internet to provide a platform for innovationLet’s take a look at each
  • Partnerships between manufacturers, networks and app developers will work only where participants treat each other as equalsPartners need to agreewho owns the customer data and relationshiphow access to network infrastructure is governedwho controls the user experience
  • All bearing in mind that the customer always wins – a recent Bain study shows that 80% of execs believe their company delivers outstanding value, and that only 8% of customers agreeBig gap between company perceptions and customer reality – for those companies who can identify this, there’s an incredible business opportunity
  • Networks have a critical role to play in the future of the mobile InternetAt Skype, we see networks as partners – we’re already working with Hutchison 3 and Verizon Wireless; we are in discussion with a number of carriers, both in Europe and across the globeEven if we don’t have a direct partnership with operators, they can benefit by letting consumers use the apps of their choice – remember, apps drive demand for Internet data plansMobile apps – even apparent ‘minute stealers’ can provide incredible value for networksthey stimulate demand for smartphones and datathey also complement existing services: on 3 in the UK, customers who use Skype spend more on SMS and data, and churn lessWorking together is the key – our customers end up with a better Skype experience, and networks with higher revenues and lower churn (and we make some money too)
  • An open Internet provides an environment for innovation and competitionInnovation crucial to developing great user experiencesCompetition crucial to providing value for customersConsumers benefit directly and immensely from an open Internetwithout an open Internet, innovation is stifled, and the customer ultimately loses – just look at the walled garden approach
  • Value for customers is what it’s all aboutThey’re buying smartphones, and want to connect them to other devicesThey’re demanding great experiences with great appsIt’s up to us to make that happenApps are the future and these three supporting pillars – partnerships, networks and the open Internet – are critical to their successGreat for consumers – but great for networks and hardware manufacturers too.Networks are vital – the good news is that they existSmartphones continue to get better and better – battery life and user experience improvingAll of these together drive deeper engagement and increase loyalty – and an experience customers are willing to pay for
  • The future of the mobile Internet: Skype's Russ Shaw at CeBIT 2010

    1. 1. Innovation in MobileRuss ShawVP and GM EMEA and Mobile · Skype<br />
    2. 2. Evolution of the Internet<br />Mobile Consumer<br />Mobile + Desktop<br />Internet<br />PC<br />10B<br />Minicomputer<br />1B<br />Mainframe<br />100M<br />10M<br />1M<br />Source: Mary Meeker, Goldman Sachs, 2009<br />
    3. 3. Evolution of the mobile Internet<br />
    4. 4. Evolution of the mobile Internet<br />38%<br />by 2013<br />Source: Informa<br />
    5. 5. Evolution of the mobile Internet<br />4.6B<br />1.5B<br />Source: Gartner<br />
    6. 6. Apps drive innovation and revenue<br />€<br />£<br />$70<br />billion<br />Source: ABI Research<br />
    7. 7. Skype’s experience on mobile<br />£<br />$<br />€<br />iPhone<br />installed on over 15%<br />Ovi<br />200M potential users<br />
    8. 8. Skype’s experience on mobile<br />Nokia N900<br />deep integration<br />Partnership with 3<br />100M minutes every month<br />
    9. 9. Skype’s experience on mobile<br />Platform agnostic apps<br />and the move to mobile<br />
    10. 10. Creating new markets<br />£<br />$<br />€<br />Enabling conversations<br />which hadn’t happened before<br />
    11. 11. Simple value propositions win<br />
    12. 12. Great experiences win<br />Easy<br />to install<br />Delightful<br />to use<br />Foolproof<br />to support<br />$<br />€<br />£<br />
    13. 13. Advantages for early adopters<br />Acquisition<br />Differentiation<br />Loyalty<br />
    14. 14. Challenge: business model for everyone<br />Manufacturers<br />make money<br />Networks<br />make money<br />Consumers<br />get the best apps<br />£<br />$<br />€<br />£<br />$<br />€<br />
    15. 15. Imperatives for success<br />Open Internet<br />platform to win<br />Innovation<br />in networks<br />Partnerships<br />of respect<br />
    16. 16. Partnerships of respect<br />Who owns customer data?<br />How is access to the network governed?<br />Who controls the user experience?<br />
    17. 17. The customer always wins<br />80%<br />8%<br />of execs believe that their company delivers outstanding value<br />of their customers agree<br />Source: Bain<br />
    18. 18. Networks are crucial<br />Apps stimulate demand<br />for smartphones and data plans<br />Partnerships<br />deliver value directly to networks<br />
    19. 19. Open Internet<br />Competition<br />provides great value<br />Innovation<br />provides great experience<br />
    20. 20. How do we all win?<br />Partnerships<br />of respect<br />$70<br />€<br />£<br />billion<br />Open Internet<br />platform to win<br />Innovation<br />in networks<br />Great apps and experiences<br />driven by consumer demand<br />Revenue opportunity<br />consumers are willing to pay<br />