Cashing in on iOS 4.0

Clemens Kohler and Bernd Ettelbruck, Detecon International
08 Sep 2010

With the new iPhone 4, Apple also launched a new operating system - iOS 4.0 - for its 85 million existing mobile devices: iPhones, iPods and iPads. At the launch event, Apple CEO Steve Jobs presented the different features that are available to developers, and demonstrated some key applications. Although these new features and applications add value for the user, they can be quite challenging for most mobile operators.

The first feature to be announced was multitasking - the ability to run many programs simultaneously. For example, Pandora, a personalized online music streaming service, showed how it was able to stream its personalized audio content to an iPhone while running in the background and using the 3G connection. As effortless and comfortable as that might be for the user, it creates high network load for mobile operators to provide streaming of high quality audio/video content, especially with an increasing number of people using it.

Later, Skype, one of the largest VoIP service providers, showed its application to the audience and presented its ease of use and level of integration into iOS 4.0. It was stunning how easy and effortless users could use Skype, just as they would use the normal phone service that the mobile operators provide. Even when quitting the Skype application, users would still be able to receive calls and other messages.

This proves to be an imminent threat to mobile operators, not only due to the increased network load they need to handle but also because this attacks their main business model: voice services. Up until now, Apple has forbidden these applications to run on 3G networks, but with iOS 4.0 this will no longer be the case. That will increase competition, since mobile operators are online in direct competition for customers with VoIP service providers such as Skype.

Another interesting but very subtle new feature was the possibility of having several exchange servers configured on your iPhone along with other enterprise integration services. As Apple is moving towards the business segment, more users will have iPhones and will be using them for constant online synchronization. Some business services that telcos offer, e.g. push email, might be hurt by this and could die out. Hence operators need new strategies for leveraging the integration of more exchange accounts.

The last, but most important, new feature is iAd. This new feature, which telcos should not underestimate, allows developers to use their applications as an advertising platform. This means that instead of letting users pay for their apps, developers could use in-app mobile advertising to refinance their investment in the application.

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