Mobile Business Models by wxh11165


									                                      gaining business value
                                   from interactive innovations

Mobile Business Models
Critical Success Factors for the Management of Innovative Mobile
Business Models

Reinhard Neudorfer

I want to give you the results of an examination of mobile business
models in the Austrian market.


1.   Theoretical Classification
2.   Approaches in Technology and Innovation Management
3.   Risk-Benefit in the Adoption process (RBA-Model)
4.   Empirical Examination of the RBA-Model
5.   Recommendations for Action
Theoretical Classification.

The examined Cellular business models are only a part of Mobile

 Cellular business models                                        mBusiness
 (broader sense) are
 services, where the creation                              Cellular business
 of benefit is directly                                         models
 connected to the use of the
 public cellular network                               WAP                      RF-ID
 (logos, background
                                                             SMS               wLAN

Cellular business models (narrower sense) are services, where the benefit is created
by the use of the public cellular network (Video-phoning, mPayment, SMS...).

Different approaches and models exist which try to explain the
success of technological innovation.

1.    The Adoption or Diffusion- Theory
      Tries to explain the speed of penetration of innovative technology through
      certain criteria (Roger‘s: relative advantage, compatibility complexity,
      trialability, observability)
2.    Approaches to the Explanation of User Acceptance
      Technology Acceptance Model (Davis‘ TAM), Task-Technology-Fit-Model
      (Goodhue‘s TTFM)
3.    The Theory of Perceived Risk (Cox, Cunningham, Bettman)
      The purchasing decision is affected by the factor of negative purchase
      consequence and its propability.

Regarding the theories of Innovation and Technology Management
- no theory fits perfectly.

Theory                       Explanation Goal                    Weakness

Adoption Theory              Explanation of the diffusion of     Number and missing
                             an innovation at the user‘s level   prioritization of the product

Diffusion Theory             Explanation of the diffusion of     Reasons for the diffusion are
                             an innovation at the                not taken into account
                             aggregated level

Models for the Explanation   Mostly an explanation for the       No model fits entirely to
of User Acceptance           reason of (non-)use                 mServices; models partly
                                                                 explain ex post non-use

Theory of Perceived Risk     Expansion of the adoption           Only takes a look at the risk
                             theory by the criteria of           dimension
                             perceived risk
The RBA-Model.

In the RBA-Model, the dimension of expected benefits is compared to
the perceived risk in order to analyse the adoption probability.


                 Economic benefit

             Service-specific benefit                             Perceived risk

                  Social benefit

                                                          Service risk
                                                                                Cost risk

                 Benefit dimension                    Theory of Perceived Risk
The RBA-Model.

The amount of perceived risk will usually decrease during the
adoption process.


                                                            Risk-reduction effect     Decreased
   Perceived part                                                                     risk
                           Perceived risk
   of the total risk

                                                                                      Perceived residual
                                                           Risk-recignition effect    risk
      part of the
                              Non-perceived risk
        total risk                                                                    Non-perceived residual

                       Awareness               Opinion forming             Decision
                         stage                      stage                   stage
Empirical Examination.

In order to get highly sophisticated results I made a close empirical

Three different Cellular business model categories:
         - Information: SMS-Information Service, mobile Information Retrieval via WAP
            - Communication: Mobile-phoning, Video-phoning
            - Transaction: Mobile Ticketing, Mobile Parking

Sample construction: quota plan, demographic data from the Austrian regulatory
agency (RTR)
Each category sample (n=610), 105 questions in a standardized questionnaire,
Verification of the RBA model with a sample of n=1830
Time Periode for the empirical examination: September - December 2003
Analytical methods: multiple regression and a causal-analytic examination
of the direct and indirect effects
Empirical Examination.

The empirical examination revealed some unexpected results.

                                                              Service risk                           Cost risk

The results of the Causal-analytic examinations
showed us:
        -     No direct impact of the cost risk (perceived                       -0,28

              costs) to the adoption probability
        -     The service risk determines the cost risk
                                                                          Adoption probability

  The price of a mobile Service does not
   influence the adoption probability.

                                                                   0,29                                0,30

                                                             Economic                                      Social benefit
                                                                                 specific benefit

                                                                          0,69                      0,37

Empirical Examination.

The gap between the benefit and the risk curve illustrates the
market penetration of the different categories in Austria.

The user of a mobile Service does not think that he has to face any risk in the
information category.

                         wahrscheinlichkeit (betragsmäßig)

The benefit in the
                              Influence die Adoptions-

communication                                                1,00
                            Einfluss aufof amount on
                                adoption Probability

category is obvious
and mainly                                                   0,80

responsible for the                                                                                               Benefit
adoption                                                     0,60


                                                                    Information   Kommunikation
                                                                                  Communication   Transaktion
Recommendations for Action.

If the following measures are taken, a greater adoption probability
of innovative cellular business models can be expected.

1.    Mobile Network Operators (MNO) or Wireless Application Service Providers
      (WASP) should not stick to reducing the price for the Service, as verified
      in the empirical examination, as it will not influence the adoption much.
2.    Information Class: The social- and the service-specific benefit should be
      given priority in order to raise the adoption probability (e.g. emphasis on
      entertainment possibilities).
3.    Communication Class: Reduce the risk of not having service (e.g.
      improvement of the public cellular network, reach the critical mass of mobile
4.    Transaction Class: Focus on communicating the advantages in comparison
      to the alternatives (e.g. time which will be saved by using the mobile service).
                gaining business value
             from interactive innovations

Thank you for your attention!

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