IN THIS ISSUE:

* Wireless IP Dial Tone, a Branding Opportunity

* Application Dial Tone, the Core of Ericsson’s Portal Strategy

* Customer Database as a Strategic Asset

* The True Competition to 3G in Japan?

* Wall Street Pick of the Week

* Geezer Geeks

I am back in San Francisco from my vacation in Finland the Promised Land of mobile phones. The Finnish operator Radiolinja expresses a noble mission in their marketing one-liner: “GSM – so the Finns could speak more!” Go and buy the latest issue of Wired and read the cover story on Nokia, it tells the whole story. Now to some of my private thoughts on what Ericsson could stand for. I would be delighted to have your comments: tapio.anttila@ericsson.com.

WIRELESS IP DIAL TONE, A BRANDING OPPORTUNITY?

A company should be known for its leadership. Ericsson is the leading vendor in wireless infrastructure but we are perceived as a mobile phone manufacturer. Our technology portfolio, heritage in voice and operator focus could perhaps offer us an attractive opportunity to brand ourselves as the company which builds the foundation for hundreds of branded applications to be provided on wireless networks: the Wireless IP Dial Tone. Just pick up a phone, tell who you are, and the Ericsson Wireless IP Dial Tone establishes your personalized communications environment.

APPLICATION DIAL TONE, THE CORE OF ERICSSON’S PORTAL STRATEGY?

What should we do with the Internet companies? Should we be a portal? Should we be a service bureau? First and foremost we should see ourselves as a company which ensures that operators get an enhanced “Yahoo Application Dial Tone” when they have bought Ericsson server solutions and Ericsson terminals (differentiation). This will enable operators to provide the branded “Yahoo Channel” to their customers – including “Yahoo Applications”, not only “Yahoo Media”. In order to achieve this, Ericsson needs to work with the “Yahoo”. Now replace Yahoo with any new media brand and you will get our preferred role as the provider of thousands of enhanced “application channels” to service providers (operators) via the “Application Dial Tone”.

In order to be able to differentiate our “application dial tone”, we need to invent and acquire technologies which bring customers value and which we can integrate in the server solutions and terminals. (Small) technology companies with aggregation, formatting, targeting, personalization etc. technologies are attractive study material for the M&A department.

We should be a portal for our own products from the support perspective. We should also act as a service bureau to do the prime installation and showcase of our infrastructure innovations (market development). Possible negative reactions from operators who might see a conflict of roles can be addressed by appropriate and clear marketing communications.

CUSTOMER DATABASE AS A STRATEGIC ASSET

How many mobile phone users does Ericsson have in its database? Not many. How do we maximize customer loyalty and add-on sales? Not enough. The starting point when building an e-business is to acquire customers before the competitor gets them. Sometimes you need to pay money to get those customers (customer acquisition cost, typically hundreds of dollars). Then you should plan for maximizing the value extracted from those customers over the lifetime of the customer relationship. You build barriers of entry through employing relationship marketing which is aimed at building habits and “stickiness” which keeps bringing the customer back to enhance his/her relation to you – preferably at a minimum cost.

The customers in our database should also be engaged in selling your products further and expanding your customer base. This can be done by adding automated features in your solution which promote your solution while it is being consumed (viral marketing). Another technique is multi-level marketing or “custopreneuring” where your customers are being credited for closing sales and/or registrations for you.

It is clear that Ericsson mobile phone users should be an object for database marketing. But how about the “Application Dial Tone”? What would give is a legitimate reason to build a worldwide database of users, including users of Nokia mobile phones? A portal for service configuration or service enhancement? A portal for managing roaming? A communications wallet (iPulse)?

THE TRUE COMPETITION TO 3G IN JAPAN?

SoftBANK has entered a venture with Microsoft and Tokyo Electric Power for low-cost broadband access to consumers for a monthly fee “well below USD 86″, which is the NTT target. In the Washington Post article, venture is presented as a competitor to the wireless roadmap. So far in Japan, the high mobile phone penetration has hinted that wide masses could actually get their first experiences on wideband services from their cellular operator. Ericsson needs to take a comprehensive approach when developing seamless 3G services: wireline broadband will be widely available – what would still make me to use my wireless connection in the same room? http://www.washingtonpost.com/wp-srv/digest/daily/aug99/jnet16.htm

WALL STREET PICK OF THE WEEK

MapQuest seems to be developing mindshare as a “map-enabler” of e-businesses, extending its reach even  into the mobile devices. I hope we can catch up later…: “We believe Mapquest has been quietly building leadership since its IPO, as the stock has suffered with the group. Last week, the company signed deals with Federal Express and Walgreens, followed this week by an expanded relationship with Yahoo!. Mapquest will provide Maps and driving directions for the Yahoo!Mobile service, which sends personalized Web data to Yahoo! users on pagers and cell phones, highlighting the almost open-ended upside to MaqQuest’s opportunity to find new types of customers. We believe some of MapQuest’s business customers are starting to prove just how scalable the company’s model is as volume-based contracts begin driving incremental, high-margin revenue with increased mapping activity on customers’ Web sites. We expect more good news regarding new customers and international developments as we pull out of summer, and believe the stock is a compelling Buy at current levels.” – Keith Benjamin, Sr Software Analyst, BancBoston Robertson Stephens (http://www.internetstocks.com)

GEEZER GEEKS 

In 1998, 75-year-old Bill Payson recognized the problem and started SeniorTechs, an Internet-based registry of 16,000 “vintage” engineers, all 35-plus. Payson had learned that there were an estimated 346,000 jobs going begging in the IT field–more than could be filled by recent graduates. He hopes that IT companies will fill the slots with the
people in his registry, who are eager to put their technical skills back to work.Industry recruiters justify their age bias in part by citing older workers’ rusty technical skills. Payson’s organization encourages seasoned engineers to update their skills, via SeniorTechs’ partnerships with CBT Systems, which offers interactive courses over the Internet, and online bookseller Fatbrain.com. SeniorTechs’ slogan is “When skills are current all ages are equal.” Source: “The Return of the Geezer Geeks,” Wired News, 26 July 1999. http://www.seniortechs.com/

QUICK TAKES – Altavista moves into offering free net access against ad viewing… Sprint PCS will start offering WAP services in September, using UP gateways and NeoPoint phones. Phone.com stock price doubled in ten days as a result… Is Support123.com “online help mall” an answer to Ericsson’s downsizing challenges?… A slightly similar idea, Umagic offers personalized expert advice sessions as a subscription service. Imagine if people start doing this at work, abusing their employer and doubling their pay – a vicious thought… By partnering with Novell, AOL has a better story to tell corporate users interested in Instant Messenger, but who want security, control, policy-based management and the other features NDS brings to the party… (To view the embedded hyperlinks, view this section online at http://webacademy.ericsson.se.)

SELECTED THOUGHTFUL READING – Johan Hjelm tipped me off this research on memetic marketing, i.e. Darwinistic approach to building evolutionary brands. Only for the seekers of truth! … The Hungersite is an absolutely ingenious take on Internet advertising. It improves goodwill-based clickthroughs by enabling you to donate food from advertisers’ budget by clicking on a button to view the sponsors. Maybe even Ericsson could consider advertising here?  (go to http://webacademy.ericsson.se for links to stories)

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This is a weekly newsletter describing the non-confidential part of my work during the past week and how I see market evolution affecting Ericsson (as interpreted my me in my role working for LME/DMA in San Francisco as a business developer with a focus on Internet applications and enablers). The report will be published every Monday. For subscriptions go to http://webacademy.ericsson.se/elists.