Great mobile Internet at a lower cost

Mobile InternetI think that we can safely say that prior to the iPhone, the mobile Internet was far from being a commercial success.

At the same time, service providers worldwide are looking for iPhone alternatives, since these are costly to commercialize. For example, an unlocked 16GB iPhone 3GS cost €559 from Orange France. The same phone with a 2-yr Orange plan starts at €149, suggesting a subsidization of close to €400, roughly 2x the cost for most devices.

This where Android, “the first free, open source, and fully customizable mobile platform”,  comes into play. In order to lower the cost to serve customers, while avoiding crazy contract terms (Rogers Wireless of Canada sells iPhones tied to 3-yr plans. Despite this they can’t keep up with demand !!!), and offering more innovation opportunities,  many service providers are looking at such open-source, Internet devices.

In less than a year since T-Mobile delivered the first of these handsets (HTC G1),  11 more have popped-up in over 30 markets worldwide. In the UK, T-Mobile released the Android-Powered Pulse this month, priced at £176.16 (€196) for the pay-as-you-go version, or for FREE with an 18-month agreement costing £27.50 (€30.70)/month. This “Android Boom“, points to the near-term growth of more affordable mobile Internet service usage. However, there are other considerations.

While lowering the overall Internet device cost is the key benefit of using an open-source mobile OS, user friendliness is critical. This depends on how handset manufacturers, service providers and developers tweak the OS, making it as easy to use, all while offering a different and/or better experience than the Apple’s mobile OS X. Motorola’s Cliq social networking device and Barnes & Noble’s Nook e-reader are just 2 examples of what is possible.

Secondly, as with the iPhone, users increasingly want to customize their devices through downloadable ‘Apps’ and media. The availability and easy, and affordable access to relevant, localized applications and content will to a large extent condition the success and added value of Android-based phones or others like them.

Finally, over the mid-term, a great mobile Internet experience will depend on the compelling value propositions offered to meet a specific set of needs (ex. social networking, pro productivity, budget-conscious consumerism, reading books & media, etc.). In simple terms, this is the ‘what you get for what you pay’. This should include core service packages for meeting a set of needs, which includes a range of essential features, complete with easy to understand pricing and usage conditions. There should be little ambiguity about what services are included, and what cost extra. That way there will be few if any surprises for customers, helping ensure their satisfaction.

The verdict is out to see when / how great, innovative and more affordable mobile Internet experiences are available to meet the needs of different groups of customers.

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