Steve Follmer consulted in Silicon Valley for many years, where he co-founded live365.com. He is currently between startups and analyzing opportunities in the mobile space. Steve holds a BSE degree from Princeton University.

“Get your head in the clouds : Are Netbooks quietly driving us toward Cloud Computing? ?”

Taipei MobileMonday 23, at Mary’s Bistro Cafe, featured a dynamic presentation from Sascha Pallenberg and Nicole Scott of Netbook News, on netbooks, the cloud, and their mutual synergy.

Sascha began with a fascinating review of the history and future of netbook hardware. Milestones included the first eeePC, which sold 3.5mm units. And more recently, ASUS has a netbook for kids, using Disney branding and distribution, with a 8.9″ display at $350. The Dell Latitude 2100 is also breaking ground at schools, its light, ruggedized, and straps right on to your little scholar. For teachers, Dell offers a 32 port docking station that recharges both the battery and the homework. Another exciting development is the eeePC T91, a “netvertible” that pirouettes into a tablet.

Netbooks are really hitting their stride, settling in on proper sized keyboards and screens, while retaining their svelte form factor. Users are waking up to the fact that they are fully capable for for our quotidian computing: email, surfing, IM, youtube, and office tasks. And they are breaking into vertical markets such as hospital and emergency workers, now that they are turning into tablets, complete with touch screens and multi-touch hardware and OS support.

Nicole does all her work for netbooknews using her netbook, with the exception of video editing. She argued that netbooks and smartphones are not exclusive, that there are valid reasons to carry both, and that the press is trumping up any “battle” between the two. Indeed carriers are now bundling free netbooks if you commit to their 3G data plan contract.

The 3G data network links smartphones and netbooks alike into the cloud. Sascha demonstrated for us a very advanced example: jolicloud, which lets you follow other users and the hot new apps, games, and services they are using (hosted on Jolicloud and sold through their app store). Jolicloud will soon operate purely in html, thus automatically syncing your service ecosystem across most every machine and platform. While also not fully released, Google’s Chrome OS will compete.

The cloud has technical advantages for many home, SMB, and even enterprise users. Less proven, but as Sascha discussed, equally vital, are business models leveraging this new paradigm. Carriers distributing free 3G netbooks with data plan subscriptions is one. Google’s targeted ad support is another; their Chrome OS speaks softly but carries a big stick. A more service oriented model such as e.g. $25/yr flickr pro acct. may also prove viable.

The cloud is the future, and the future is now. The client computer is too fat for most tasks; do most users really enjoy fretting about backups, disk crashes, viruses, and syncing? Tonight’s talk brought this vision into focus. The cloud enables a thinner desktop, which can take the form of a netbook, or a smart phone. Netbooks and the cloud are synergistic. Netbook unit volume in Taiwan now rivals conventional notebooks. Even meagre CPUs are adequate to launch linux and run a browser. CPU’s and operating systems are becoming commodities, and the Wintel model is under assault.

How are the big players affected by the netbook-cloud juggernaut? The obvious winner is Google, and the losers include Intel and Microsoft. Amazon has been selling cloud services for years. Taiwanese manufacturers invented netbooks, and they are profiting, though margins can be low. Apple both wins and loses; their notebook sales are being hurt by netbooks, they must release their own netbook tablet; their iPhones and iPods benefit from the cloud but their back end lags Google’s. And in the end, the biggest winner is the end user.

Resources

Netbook News http://www.netbooknews.com/ (Video, English)
Netbook News http://www.netbooknews.de/ (Text, German)
Mary’s Cafe http://www.maryscafe.com.tw/ Taipei’s Fine Dining Top Steak Pasta House

Steve Follmer consulted in Silicon Valley for many years, where he co-founded live365.com. He is currently between startups and analyzing opportunities in the mobile space. Steve holds a BSE degree from Princeton University.

iPhone Gold Rush – New Business Opportunity driven by iPhone.

Our 22nd event convened with a healthy crowd at Mary’s Bistro Cafe for some hearty Australian fare.

Other Steves (Jobs, Wozniak, Jurveston, McGarrett, Ballmer…) were unavailable, and I was pleased to accept an invitation from Scott Lo (Business Development Manager at Toro) to make the first presentation: How and why you can get a free iPhone, and other predictions about the future of the mobile industry. I’m creating a small startup involved in LBS, which will target the US market partly because of its size and also because I don’t want to compete with my colleagues here in Taipei. I’ve been analyzing the iPhone, and Scott asked me to share my findings with you.

Wikipedia has a decent table summarizing the three different generations of iPhones http://en.wikipedia.org/wiki/IPhone_models. The latest model, the 3GS can be pre-ordered from CHT and should be available in August, probably the 19th.

But I begin with two primary criticisms of the iPhone. First, it lacks support for background apps. How can you run a chat client without background apps? Well, they’ll fix it, but give them a year or two. I suspect this is related the second criticism: the battery barely lasts a day. Indeed in the 3GS, they had to underclock the CPU. Apple is rumored to have built a team of custom chip designers; I suspect this is to both cost reduce the iPhone and increase its battery life.

So, the iPhone is not perfect, but on balance its more than good enough. Its on time enough and its on budget enough. They’ve built a huge lead on Google’s Android phone. They’ve sold over 20 million and are well on their way to overtaking the 50 million Windows Mobile devices early next year.

Now, as important as the hardware and software, is the App Store. It really bulldozed the barriers facing small creative developers. I know some of these developers and they have been unhappy with the carriers. Well, lets just look at the record. The first cell phone call was made in April 1973. The iPhone was first sold in June of 2007. So the carriers have had decades, during which approved and released, I will guess, a few hundred applications. And in two years, Apple released 50,000 applications. Take a look at the App Store Wall from Apple’s developer conference last month.

So if the iPhone is so successful, why would they make it free? Apple is never eager to lower prices. Well, there are three reasons I’m predicting this. The first is funny math. What does the iPhone actually cost, to apple and to the consumer. Lets’ do some rough calculations using USA numbers. Everyone is going around talking about the $99, $199, $299 iPhone. But the reality is you also sign a 2 year contract at over $70 a month. What actually happens is Apple makes the iPhone for less than $200, and when you sign up with their carrier partner AT&T, you agree to pay AT&T nearly $2000 over those 2 years. And AT&T gives Apple $500 out of that revenue stream. So at the first level, Apple makes a device for $200 and sells it for $700. And these numbers are borne out, approximately, in Hong Kong, one of the countries where you can simply buy an iPhone for cash, with no contract, and there the new models cost HKD 5500 and 6500. Last year Apple made a big splash by reducing the price of the iPhone by $200… while at the same time increasing the cost of the 2 year contract by $10 a month. So they actually raised the cost, but many buyers don’t analyze the purchase and in packaging the cost in this way is clearly effective.

The second reason I think the iPhone will be free is that Apple is sometimes willing to sacrifice margins for long term gains, as we can tell from their Mac Mini. As we can estimate from a tear-down by iSuppli, the mac mini costs $376 to manufacture, but sells for a mere $599. http://www.isuppli.com/NewsDetail.aspx?ID=20432 By contrast, the iPhone 3GS costs $179 and bring in a revenue stream of $700 or up. http://www.isuppli.com/NewsDetail.aspx?ID=20398 I don’t have Apple’s exact spreadsheets but what is clear is that Apple is wiling to cut margins on a product if it serves their big-picture long-term strategy. The Mac Mini is strategic as a box that can slide in and convert a Windows user to a lifetime mac customer. The iPhone is strategic for capturing phone users and a long term revenue stream of carrier fees, and music, video, and software sales, and even Mac computer purchases.

I really have to give respect to Apple: first they kick the music industry in the ass, then they kick the mobile industry in the ass, and to top off these ass-kickings are strategically related. Breathtaking strategy at the highest level.

The third reason is competitive pressure. Google has said there will be 20 different Android handsets this year. You can bet there will be a lot of diversity of features and prices. And Google will harness the marketing budgets of those 6 or 8 manufacturers, and hundreds of carriers, all promoting their Android handsets. And I further suspect some carriers may be a bit unhappy with Apple’s new world order and would like to use Android handsets to try to hold Apple in check.

So for these three reasons: hidden charges, long term big picture flexibility, and competitive pressure, I predict Apple will make the iPhone free. Now they may charge an extra $10 a month. And it may be the old low end model at first. But its going to be free, for anyone who signs a contract for $80 a month. This is Apple’s “ace in the hole” against Google, possibly as early as September. Of course they’re not completely free, and its only a $99 price reduction, but as Apple teaches us day after day, the psychological impact is paramount.

What are the broader implications of this for the mobile industry? First, the handset is no longer a handset. At a deeper level, the phone is not just a phone, not just a handset. For Apple is a channel for selling software, music, videos and computers. For Google a handset is rather, a platform for delivering ads (which can be location based). Eric Schmidt has said its mobile is going to be bigger than internet. And for Toro, it is a platform for mobile marketing, a 24×7 channel to the customer.

Apple and Google want to carpet bomb the planet with hardware and software. They are not in the business of selling widgets. They are in the business of capturing users and their long term revenue streams. And I submit that Microsoft, Sony-Ericsson, RIM, Nokia, are tied to outmoded business models that can no longer compete with the new models, and they will be hemorrhaging market share.

A second, related implication is that smartphones are going to accelerate their push downmarket into feature phone territory. Set top boxes for cable TV in the USA are also expensive, but they find a way to give them away or rent them out cheaply, because they enable far larger revenue streams, with high NPVs. Throw in the competition between Google and Apple and I only see prices falling.

The big picture involves 2 billion handsets in the world, with 1 billion more being sold this year, primarily as replacements. Perhaps up to 20% of these phones can be defined as smartphones. Sales figures from Q408 showed OS distribution as Symbian with 47%, RIM with 19.5%, Windows Mobile with 12.4%, Apple with 10.7%, and Google hardly on the chart. However, it is clear that things are changing quickly. I expect smartphones to push down market to beyond 30% in the next several years. And I predict Apple and Google to shoot to the top of that league table, with Nokia getting hurt the worst. Nokia, RIM, and Microsoft are more or less simply selling widgets and despite having slapped up app stores their business models are not built for the 21st century. They’re not positioned to pump ads and music through the handset to the consumer like Apple and Google are, and they will soon find themselves replaced at the top of the league table. Google have up to 20 handsets running Android within about 6 months, and in response Apple will drop their prices $99 thus making their low end model nominally free. You can download the presentation here.

Resources:
http://mashable.com/2009/03/21/iphone-economy/
http://www.techcrunch.com/2009/05/06/just-how-much-money-can-free-iphone-apps-make-quite-a-bit/
http://www.appleinsider.com/articles/09/06/11/why_apple_keeps_iphone_specifications_quiet.html
http://www.businessweek.com/technology/content/jun2009/tc20090612_492771_page_2.htm
http://moconews.net/article/419-report-smartphones-to-be-29-percent-of-total-market-in-2014/
http://www.youtube.com/watch?v=T2IMHuZXfl0 AppStore
http://www.youtube.com/watch?v=8To-6VIJZRE Ballmer

Having whet everyone’s appetite for the iPhone (and yes, I did just buy one), we greeted the presenters from Ayaris 9. This firm outsources iPhone development to their skilled team in India. Todd Enger learned to spec out products at Hewlett Packard; he and his team work with you to define your spec, and then they oversee its completion via their offshore team.

Included in their portfolio, they presented a GPS based coupon application, software to present medical videos, and even a karaoke application, among others. Further information is available via their website.

Steve Follmer consulted in Silicon Valley for many years, where he co-founded live365.com. He is currently between startups and analyzing opportunities in the mobile space. Steve holds a BSE degree from Princeton University.

21st MobileMonday Taipei Event Report
21st MobileMonday Taipei-Mobile Open Source

MoMo 21 proved enjoyably intimate, giving many of us a chance to catch up on friends from earlier meetings. As usual, the conversation was fueled by abundant Aussie fare and hospitality at Mary’s Bistro Cafe. The two presentations then centered on open platforms.

Mirko Linder, lead developer for Paroli at Openmoko, illuminated for us the Paroli platform. This is an entirely open hardware and software GSM handset platform, built on the Neo Freerunner phone, in which all chips and architecture are fully documented and all firmware can be re-flashed. The Frerunner runs a Linux Kernel, and offers wifi, gsm, bluetooth, accelerometers, and touchscreen. OM2009 is Openmoko’s application platform running on top of this. The cherry on top, Paroli, is a python daemon which enables users to integrate and share data and control among most phone software with the ease of a scripted language. In a way, the entire project is a paragon of the open source philosophy, of generating new ideas and a common wealth, through sharing and through enabling users to program and rapidly prototype. An exciting project to which we wish the greatest success. For more information, check out Mirko’s slide show and Paroli.

Next up, Nicolas Sauvage, Asia General Manager for Open-Plug explained the use of open source on feature phones. Open-Plug is used by the majority of Taiwan’s OEMs and ODMs, who use their ELIPS development platform to dramatically reduce both the time and cost of creating handset software. Instead of creating a monolithic statically linked executable for the handset, the Open-Plug system enables the software subsystem to be built from components that are dynamically added. And indeed, these components can be open source. You can find his presentation here.

This raises the interesting subject of smart phones pushing downmarket into feature phone territory. Price will certainly remain the primary driver on any spreadsheet, but I believe sales are subject to additional dimensions. As a point of reference, iSuppli has estimated that the iPhone has about $200 in material cost, and as we know it retails for about $600. Indeed these numbers simply out of reach in many markets. But for the consumer, this hard cost is masked by bundling the phone into a 2-year contract. For the carriers, the handset is more than that, it is the vehicle through with voice, data, and SMS plans are delivered. For Apple it is a music delivery vehicle, and for Google is is an ad delivery vehicle. Given these powerful forces, it seems nobody will let the handset be “just a phone” and that consumers will have to search harder and harder for any pure phone handset. In sum, in addition to wagering on the win, place, and show among smart phone players, we can also watch the smart phone vs. feature phone boxing match. I don’t have any hard numbers at hand, but Infonetics predicts 1.1 billion handsets sold in 2009, and double-digit growth for smartphones for the next 5 years, with dollar (though not unit) volume exceeding feature phones by 2013.

The evening concluded with a drawing, with Makato Chiu from Pixostyle giving away 20 Golla brand cell phone bags.

Sponsored By Pixostyle

>Steve Follmer consulted in Silicon Valley for many years, where he co-founded live365.com. He is currently between startups and analyzing opportunities in the mobile space. Steve holds a BSE degree from Princeton University.

20th MobileMonday Taipei Event Report
20th MobileMonday Taipei – Windows Shopping: the Future of Windows Market Place for Mobile

MoMo 20 was held April 20, 2009, at Mary’s Bistro in downtown Taipei, where we gobbled down Australian pizza and three presentations.

FFirst off was Vincent Chiang of Microsoft Taiwan, presenting their .NET Micro Framework. In a word, it turns feature phones into smart phones. The framework is already in use on devices such as Garmin navigation devices and Comcast set top boxes; the version for cell handsets will launch later this year. Nicolas Sauvage and Open-Plug are assisting local manufacturers with integration. The platform is fully elaborated here.

Next, Kai Su of iMobile Mind discussed their experience developing for the Windows Mobile platform. They have extensive worldwide expertise generating custom turnkey solutions for industries including field service, healthcare, hospitality, real estate etc. Industry data shows double digit annual growth across numerous industries enjoying extensive deployments of handset and PDA “Enterprise Mobility Solutions”. Check out their powerpoint.

Finally, Johnson Huang, a Microsoft MVP at Delta Electronics, shared his positive experiences developing for Microsoft. Their “Windows Marketplace for Mobile” boasts 20,000 applications, with developers cut in for 70% of revenues, as seems standard. In particular, Johnson explained how VUI (Voice User Interfaces) are particularly suitable for handset apps. The presentation can be downloaded here.

Over the last 3 sessions, we’ve seen what Apple, Google, and Microsoft are bringing to the mobile world. Revolutionary not just on technical merits, they also level the playing field for consumer and developer alike, by bringing the carriers to heel, and through a veritable mall of app stores. With handsets being upgraded on an annual basis in many countries, what will the league table look like a year from now? Microsoft and RIM have strong established user bases, but Apple has the inside track, and nobody is counting Google out. We live in interesting times.

Steve Follmer consulted in Silicon Valley for many years, where he co-founded live365.com. He is currently between startups and analyzing opportunities in the mobile space. Steve holds a BSE degree from Princeton University.

19th MobileMonday Taipei Event Report

19th MobileMonday Taipei: The Android Experience

Tonight at a Momo new venue, Yuma Southwestern Grill, we enjoyed presentations from two top Android developers. Spencer Riddering provided a sneak preview of his forthcoming to-do list app, überdo, and Eric Huang of jmap.cc showed off a weather application he developed in a mere 3 days. Both developers were elated with Android and its java-like environment. Strategy Analytics predicts that Android will top the market with 50 million units by 2012.

At this moment, Android is only available on the G1 unit through T-Mobile in the USA. But expect dramatic changes: the HTC Magic “G2″ is to ship next month, followed by as many as 10 models in 2009, from diverse manufacturers in the Open Handset Alliance: LG, Samsung, ASUS, Acer, Huawei, and Sony Ericsson, including 5 new Android models from HTC. Google has placed a dedicated team in Taiwan to work with manufacturers. Lastly, Android is anticipated on a netbook platform such as the eeePC.

Eric Huang of jmap.cc spoke in Mandarin about Android and his development experiences, supported with an extensive Power Point presentation in English. He explained the many parts of the Android platform: it is an application framework, the Dalvik virtual machine running atop a linux kernel, an integrated browser, optimized graphics, SQLite databse, media support, GSM telephony, Bluetooth, EDGE, 3G, and WiFi, camera, GPS, compass, and accelerometer. Android Market is Googles answer to Apple’s App Store; it currently stocks about 2300 apps, both paid and free. Eric can be reached through his blog http://blog.jmap.cc

Spencer Riddering of Lean & Keen treated us to a sneak peek of their powerful to-do list application überdo. Like Eric, he entered the Google coding challenge and was ranked in the top quartile.

Clearly RIM has established a loyal base of business users, and Apple has a tremendous head start. Google has clearly come late to this market, but Google has come late to many markets only to later dominate them. Google also operates from a different business model, basically offering Android for free to handset manufacturers. I expect that the diversity of android handsets and its free OS and web services will put pricing pressure on Google’s competitors. An iPhone which costs $200 to manufacture costs the consumer $2400 over the course of a two year contract and this will not last. Lastly Google has a powerful array of cloud services that will be integrated with their handset. The interesting question is whether Google will be able to manhandle the operators as Apple has.

Come back in a year and lets see what kind of numbers can be put up by a dozen different gPhones from diverse manufacturers and carriers, at a lower cost than their competitors, and leveraging the power of a free, open-source, open-standard OS backed by industry leading cloud services.

links:
HTC to unveil new Android phone in Q2
HTC workforce up 46% as Android mobiles defy slump
Google betting on mobile Internet
Android Developer program
Taiwan Android Developers Group
Endagaget Taiwan Android Developer Forum
Android Market
Spencer Riddering
Lean & Keen
Eric Huang

Steve Follmer consulted in Silicon Valley for many years, where he co-founded live365.com. He is currently between startups and analyzing opportunities in the mobile space. Steve holds a BSE degree from Princeton University.

MoMo Taipei 17 kicked off with a security presentation from one of our
sponsors, Thales Group. With operations in 50 countries, 68,000
employees, and 17 billion dollars in annual revenue, Thales is a world
leader in Mission-critical information systems for the Aerospace,
Defence and Security markets. Dr. Welland W. N. Chu, Regional Business
Manager for North East Asia for their 400 person Information Systems
Security group, delivered a convincing explanation of the importance of
this market.

Thales implemented the contactless cards and tokens for our MRT and the
tickets for our high speed rail, along with the readers on Taipei’s
buses and parking lots. Thales handles the payments securely, and
disburses the money. Thales technologies are used in payment terminals,
bank communication networks and the secure manufacturing of bank and
credit cards. In the financial sector, more than half the world’s banks
and most major stock exchanges rely on Thales technologies. With nobel
laureates on their research team, they also discovered giant mageneto
resistance, without which your hard disks and laptops would weigh 25 kg.

In vital markets such as security, there is of course competition. One
Thales advantage lies in their strong existing connections to
government, defence, and intelligence communities worldwide. If any of
our readers is unsure of the need for security, in response to a
question Dr. Chu noted that in testing customer sites they can
compromise 95% of their networks.

Thales system also features a unique ability to seamlessly traverse or
roam sundry fixed and mobile networks and protocols, while maintaining
ironclad security. A turnkey approach to security not only minimizes
training costs, it also keeps the network safe. Their product operates
on Windows mobile PDAs (about 12% of smartphones). Momo readers will
also want to know that Thales Transport’s new generation ticketing
system is ready to accept transactions by NFC.

Resources:

Thales
Smartphone

CyWee is a 1 year old startup, spun off from years of research at Taiwan
government-industry think-tank ITRI, with funding from ITRI and SBCVC. Their
CyWee Z is now for sale: a PC input device like a Nintendo Wii on
steroids. Check out their demo:

The Z is the only one of its kind with a
3-axis accelerometer and a dual-axis gyro. And rather than a bunch of cheap plastic
attachments, the controller itself bends and twists into 4 different
shapes: sports, gun, car wheel, and airplane yoke. Rather than being
limited to low res Wii graphics, the Z can drive any game on your PC,
since the Z maps useful keyboard strokes into physical actions on the controller.
It currently comes with support for 10 offline and 2 online games.

By some estimates “The total market value for PC gaming hardware
in 2008 was just over $20 billion, and that will grow to over $34
billion by 2012.” And as a 3D mouse, the Z is also part of the PC input device
market. CyWee plans expansion to the international market, and
has numerous other products in their R&D pipeline.

The Z is sold in Taiwan for NT$3990 bundled with 3 game titles, while supplies last.
Shopping at PC Home

Resources:

PC Home
Worldwide PC Gaming

Steve Follmer consulted in Silicon Valley for many years, where he co-founded live365.com. He is currently between startups and analyzing opportunities in the mobile space. Steve holds a BSE degree from Princeton University.

GPSStar presented at Mobile Monday 14, and we were invited to a follow
up interview with their CEO, Mr. Ben Inatsu. GPSStar has licensed the
Navitime technology from Japan for deployment in the greater China
region. Their primary product was launched via ChungHwa Telecom (CHT)
over a year ago: it turns your cell phone into an interactive map,
providing directions, integrated with public transit schedules. $3 a
month (99 NT) gives you unlimited use, including data. This service runs
on 18 AGPS handsets; a lite version costs half that (and for technical
reasons does not include real-time navigation). This pricing is about
half that of Japan, where Navitime has 10mm users each month.

GPSStar has about 2 dozen employees in Taiwan, primarily engineers. They
seems an engineering driven organization, though this comes from an
integrity in which they are very concerned with providing accurate
directions and indeed restaurant phone numbers. The accuracy of all the
data they deliver reflects on both GPSStar and the carrier, and they
take this responsibility seriously. They are currently establishing a
China headquarters located in Beijing, the center for both carriers and
manufacturers.

While easy to understand in terms of their handset navigation products,
we must not overlook the fact that they have in fact built a LBS
services platform. Their software will soon cover 200 handsets, nearly
all the models sold in Taiwan. Beyond that, they are doubtless engaged
in verifying maps to encompass all of greater China.

In Japan’s mobile ecosystem, the carriers dictate specs to the handset
manufacturers. Thus they have demanded and received far greater AGPS
penetration, rapidly approaching 100%. Carriers worldwide face declining
revenue from voice, as it is replaced by IP phones. They therefore look
to value added services, and in Japan their value-add income now exceeds
their voice income.

China’s cellular ecosystem is most analagous to Japan, though it is
fairly unique in that manufacturers are launching services there. Nokia
for example is very inventive and keen to establish some services
revenue, but this is something the carriers have prevented in most
markets e.g. USA. Mr. Enatsu noted that we have not seen the end of
these ecosystem turf wars.

The Taiwan market and ecosystem is of course different still. It is
smaller than Japan and China, and the government does not take as strong
a hand in industry. As such, the carriers cannot dictate features to the
handset manufacturers here. And because it is small, handset
manufacturers have not floated services here, though Taiwan still
remains useful as a testbed for products intended for greater China.

One can certainly imagine a variety of additional LBS products, and
unique marketing approaches for GPSStar. But I cannot fault their
attention to the nuts-and-bolts of covering more handsets and more
countries. Furthermore, I expect they will eventually market the LBS
platform, for themselves or new partners to offer novel LBS products.

The recent controversial study in Germany which monitored peoples daily
movements through their cell phones revealed that people generally
frequent the same locations over and over again. This suggests that LBS
might be more useful to specific classes of users, and indeed GPSStar
may next year offer products targeted to tourists and expats.

GPSStar does not face the market risk or technology risk of most
startups. This is not to diminish their work in covering so many
handsets and such a large geography. Indeed this acts as a sustainable
competitive advantage. Their main risks lie in the transition to
mainland culture, business partners, and government regulation. Indeed
the need for local knowledge further discourages competition.

GPSStar added 3000 Taiwan subscribers during the week of our
interview. Their work is bearing fruit. Their business model and risk
profile are solid. Their platform runs on nearly every cell phone in the
country, delivered through their partnership with CHT. And their goal
is for their LBS platform to become standard on every handset in Greater China.
We wish them every success in their expansion to the mainland.

Mobile Coupons and Price Comparison -By Steve Follmer

Steve Follmer consulted in Silicon Valley for many years, where he co-founded live365.com. He is currently between startups and analyzing opportunities in the mobile space. Steve holds a BSE degree from Princeton University.

Vpon.com

Victor Wu, founder and CEO, demonstrated Vpon, a coupon browser service which is up and running in Taiwan. Vpon was born from an award winning entrepreneurial project he created while completing his MBA in London.

Users install Vpon’s coupon browser, which runs on java and up to 80% of the installed base of phones. Technologically, Vpon has taken steps to economize on bandwidth, and depending on your data plan it costs less than $1 to receive 30 coupons. They also offer a form of location based service to filter coupons for your specific neighborhoods. Mr. Wu values the user relationship and has avoided pushing too much data at the consumer, even on an opt-in basis. There are plans for internet browser based management of the coupons as well.

Vpon has also been responsive to the needs of their advertisers, allowing them to target their coupons to specific demographics, and collecting post-sale customer satisfaction surveys via their mobile app.

In less than a year Vpon has grown to 10 employees, deployed their application, and inked deals with Starbucks, Pizza Hut, and Mister Donut. They have acheived break-even; an infusion of working capital would fuel expansion to additional countries.

Smart Buyer

Smart Buyer has launched Mprice, a cell phone based price comparison service. They presented a very insightful chart comparing web-based shopping/buying with brick & mortar (B&M) shopping. In the USA 93% of consumer purchase remain B&M, a number which approaches 97% in Taiwan. mPrice forges a unique solution that offers the best of both worlds: the convenience of network based price checking, with the convenience of B&M shopping.

The business model contemplates charging the consumer 15 cents per use. They also gather useful buying data which is sold to the channel. They are signing deals with the top chains, thus offering a countrywide solution. And they have initially singled out the low hanging fruit of 3C products.

Smart Buyer has vision and has made some good decisions. It goes without saying that their spreadsheet is driven by their installed base and daily use. If only an affilliate marketing program were offered by the local chains or could be negotiated, user fees could be eliminated.
Or if any user fees could be made more invisible through some package promotion with their carrier partners like CHT.
Smart Buyer is partnering with CHT and 7-11, and various media outlets.
These firms are on board with their vision and will prove essential in
increasing the installed base.

Commentary

I always stop to ask: list every step needed to get my parents using this product, every mouse click, every keystroke, every credit card authorization, every download, every install. Tonight’s presenters can benefit from carrier distribution deals that pre-install their application and bundle a data plan. Failing that I would set up kiosks with technical staff to install the app along with a pile of v-coupons or free trial incentives.

There has to be a viral angle here too. Let people share coupons with their friends to spread both the app and the coupons virally. Where one users tells their friends that the app is safe and useful, and even helps them install it. With an incentive e.g. “10% off on dinner. If you and your friend BOTH present a Vpon 15% off”. The merchants should also step up to the plate and help seed.

To get these and other products to turnkey simplicity, where not only our parents but our grandparents use them daily, it takes an ecosystem. Japan remains an intriguing example, where indeed parents and grandparents use many advance mobile apps.As with wasabi, Japanese ecosystems don’t always take root in the West. But I have a feeling Taiwan could forge a solution that bridges East and West.

You can see the photos from the 15th MobileMonday Taipei event here.