Key Technological Trajectories and the Expansion of Mobile Internet Applications

Transcription

1 Key Technological Trajectories and the Expansion of Mobile Internet Applications by Jeffrey L. Funk Professor, Hitotsubashi University Institute of Innovation Research 2-1 Naka, Kunitachi, Tokyo Japan FAX: TEL: To Appear in a Special Issue of INFO

2 Key Technological Trajectories and the Expansion of Mobile Internet Applications Abstract This paper describes the key technological trajectories and their potential effect on the expansion of mobile Internet applications. The initial success of entertainment contents in Japan 1999 caused manufacturers to introduce phones with color displays, polyphonic tones, cameras, Java programs and these functions are supported by other technological improvements like faster microprocessors, larger memory, and faster network speeds. Coupled with an evolution in user behavior, these technologies are making the phone a portable entertainment player, a new marketing tool for retailers and manufacturers, a multi-channel shopping device, a navigation tool, a new type of ticket and money, and a new mobile Intranet device. These trends will have a large impact on competition in the global mobile phone market as dominant designs emerge at the global level. 1

3 1. Introduction Growth in mobile Internet services and contents expanded from Japan and Korea in 2000 to Europe in 2003 and it is expected that this growth will become a global phenomenon by the end of Growth first occurred in the Japanese market (See Table 1) through the creation of a critical mass of young users and entertainment applications where micro-payment systems played a key role in the availability of these entertainment contents. This growth led to improved mobile-internet compatible phones with color displays, polyphonic tones, cameras, and Java programs. Korean service providers quickly copied the Japanese services and European service providers like Vodafone and Bouygues Telecom have subsequently done the same following the growth in SMS (short message services). As of late 2003 there were more than three million subscribers to European mobile Internet services like Vodafone Live! and i-mode both of which are based on Japanese technology. Understanding how these mobile Internet services, technologies, and applications will evolve is a critical issue for managers and policy makers. The mistaken initial emphasis on business users and applications by most Western service providers (e.g., see J.P. Morgan, 2000) underscores the difficulties with doing this. Even Western academics and analysts have placed far more emphasis on business than other applications in the mobile Internet (Bergeron, 2001; Burkhardt, et al, 2002; Kalakota and Robinson, 2002; Sharma, 2001). This paper uses a model of industry formation to explore how these mobile Internet services, technologies, and applications will evolve. A key part of this model is the interaction between technological trajectories and the expansion of applications. The application of the model to the mobile Internet is based on published information from 2

4 both Japanese and English sources and interviews with more than 150 managers involved in the mobile Internet in Japan and to a lesser extent elsewhere. I asked these managers about the current and future impact of the mobile Internet on their businesses with a focus on so-called lead users (von Hippel, 1986). I use this information to describe a few paths by which the mobile Internet may evolve in six contents/applications; additional paths are described in (Funk, 2004). The paper first summarizes the origins of the mobile Internet using the model of industry formation followed by a summary of the technological trajectories and their effect on these applications. 2. The Origins of the Mobile Internet Figure 1 summarizes a model of industry formation (Funk, 2003, 2004). The model represents the origins of new industries as the interaction between multiple technological trajectories, where progress in a single trajectory occurs through improvements in the trade-offs between relevant technological variables (Dosi, 1982). The speed with which these multiple trajectories cause industry formation depends on finding a set of initial users for whom the new technology is economically attractive. The latter process occurs through the interaction between product designs and user needs (Clark, 1985; Bijker et al, 1987) and results in the emergence of a dominant design, which will define the interfaces for complementary products and many of the incremental improvements that are subsequently implemented (Anderson and Tushman, 1990). Growth in these initial applications causes sub-trajectories to emerge from the main trajectories and drive an expansion in applications. The technological trajectories that led to the formation of the mobile Internet are 3

5 improved displays, packet technology, digital content, and microprocessors, which were being driven by other industries like laptop computers, the Internet, and personal computers. The key interaction between products and users in the Japanese mobile Internet that led to industry formation was between entertainment contents and young people. The early success of NTT DoCoMo s i-mode entertainment contents led to positive feedback between content providers, users, and phone manufacturers (Funk, 2001, 2004), which can be interpreted as both a bandwagon (Rohlfs, 2001) and agglomeration (Marshall, 1920) effect. KDDI and Vodafone began to become part of this phenomenon in early The success of i-mode caused NTT DoCoMo s competitors, KDDI and Vodafone to introduce micro-payment and packet services as part of their mobile Internet services, which they both had introduced in 1999 (KDDI uses the WAP protocol). Micro-payment services facilitated the entry of entertainment content providers and packet services reduced user costs and waiting times. The reason why KDDI and Vodafone quickly introduced these services and the US and European service providers did not is because the success of i-mode provided evidence that investments in mobile Internet technology could pay off and it was relatively easy for Japanese content providers and manufacturers to modify their contents and phones for the services offered by KDDI and Vodafone. The success of entertainment contents and the positive feedback that these successful contents created between contents, users, and phones provided this evidence. Evidence that a mobile Internet service (e.g., WAP) could succeed in the European and US markets did not quickly emerge because the service providers did not introduce micro-payment systems, which were a prerequisite for entertainment contents like 4

6 screen savers, horoscopes, and ringing tones and instead focused on business contents like financial, travel, and shopping services that do not require micro-payment services. On the other hand, the success of SMS with young people including their use in downloading ringing tones and screen savers in 2000 caused European and subsequently U.S. service providers to recognize the importance of young users and entertainment contents. This encouraged a number of European and subsequently U.S. service providers to introduce mobile Internet services that emphasize young people and entertainment contents; the most successful services as of late 2003 are i-mode services and Vodafone Live! 3. Key Technological Trajectories Growth in the initial applications in the Japanese mobile Internet has caused sub-trajectories, where competition in the mobile Internet currently takes place (as of late 2003), to emerge. Some of these technological trajectories will quickly fizzle out as customer needs are quickly satisfied. For example, increases in the number of polyphonic tones appear to have stopped at about forty and color displays appears to have reached their limit at 250,000 different colors. Although some camera phones now contain more than one million pixels, two million pixels will provide quality that is equivalent to what is found in traditional photographs and probably enable camera phones to read and process finely printed URLs, mail addresses, and bar codes. On the other hand, other technological trajectories will likely continue for many years. For example, increases in display size are likely to remain a key technological trajectory for many years to come since small displays are one of the largest problems with mobile Internet compatible phones. Displays based on EL (Electro Luminescence) 5

7 are expected to be widely used by early These displays are thinner and thus 20-30% lighter than TFT-based displays because they produce their own light and thus do not require a separate light source. Displays that are based on light emitting polymers (LEP) also create their own light; more importantly, by applying a thin polymer film to a plastic substrate, firms can make displays that are thinner than one-tenth of an inch and can be rolled and folded. Thus it may be possible to double, triple, or even quadruple the size of existing phone displays over the next five years thus dramatically improving the user interface. 3.1 Processing and Network Speeds More immediate effects on the user interface are expected from increases in processing power, memory, and network speeds since they can improve the user interface without increases in the size of the display. Increased processing and memory capabilities reflect Moore s Law. Decreasing semiconductor line widths have caused computing speed and memory size to roughly double every 18 months for the last 40 years and similar trends are already seen in the mobile Internet where the need for lower power consumption requires different circuit designs. Phones released in late 2002 and early 2003 had speeds in the 100 MHz to 200 MHz range and speeds greater than 500 MHz are expected by Phones with more than 5 megabytes of internal memory also were released; some could save 2000 photos (taken with a 300,000 pixel camera), 2000 ringing tones (with 40 polyphonic tones), or 100 Java programs. Network speeds will also increase primarily through the diffusion of third generation services and according to Qualcomm (2000), these services may cause packet charges to fall as low as $0.022 per megabyte or 1/500 of current i-mode charges. 6

8 If data charges were to fall as low as $0.022 per megabyte, a three-minute MP3 file could be delivered for as little as $0.07 and a two-minute, medium resolution video clip could be delivered for a cost of about $0.13. We can also expect other forms of networks to play an important role in the mobile Internet. For example, phones with infrared functions that use the IrMC standard are already being used in Japan to connect phones with cash registers, concert ticket machines and each other (e.g., play games and exchange name cards), and control televisions and karaoke machines. New infrared standards like IrFM enable credit card information to be securely transferred between phones and cash registers. Non-contact smart cards that rely on short-range radio transmission are being used as transportation, concert tickets, and pre-paid cards (<$50US); phones that contain these smart card functions are expected in 2004 (Harui, 2003). It is possible to download data from WLANs and exchange data between devices with Bluetooth, infrared, and short-range radio transmission. NTT DoCoMo and other Japanese service providers are planning to make their phones compatible with WLANs and Bluetooth. These technologies and faster processors could enable the use of so-called personal mobile servers that allow short-range communication between various wearable devices (Bylund and Segall, forthcoming). 3.2 Client side processing and improved user interfaces Increased processing power, memory, and network speeds can improve the mobile phone s user interface through more client side processing of pre-loaded or downloaded programs. Java is currently the most popular program for doing this although other programs exist and the competition between these programs is not over. Users can 7

9 download a Java program once and then either utilize the program independently of the network or in conjunction with data that is subsequently downloaded from the network. Alternatively, the Java program could be pre-loaded in the phone thus eliminating the need for downloading the program at all. Although games were initially the most popular content for Java programs, many news and other text-based sites now offer their contents as part of a Java program since the use of Java programs can reduce the data downloading requirements of text and the user waiting time by as much as 80%. Faster processors, ones with lower power consumption, and larger memory will facilitate the use of Java and other client-side programs. Faster processing times reduce the time to activate a program and thus enables the use of larger programs. Lower power consumption enables the longer use of these programs. Larger memories increase the size and number of programs that can be saved. Although some phones can now save more than 100 Java programs, if all content providers offered their own Java programs from which users were expected to download information, users would still only be able to save a small fraction of these programs. Another alternative is for content providers to format their contents for standard Java programs. Phones released in the spring of 2003 facilitate the use of such standard programs since they can access data for a Java program from different servers. Added advantages of defining standard programs (or objects for making these programs) would be less development costs for content providers and better control of viruses for service providers. Of course determining the appropriate standard Java programs and making your program one of these standard programs is a more complex issue. Increased processing power, memory, and network speeds may also improve the user interface in more radical ways. Increased processing power will improve the 8

10 performance of voice recognition systems and 3D rendering techniques. Single word voice recognition systems have been available for several years in Japanese phones and it appears that user resistance to making voice commands is a bigger bottleneck than actual technical problems. As for 3D rendering techniques, phones with 50 MHz processors can display 10,000 polygons a second while phones with 500 MHz processors can display 640,000 polygons a second; the latter will probably be available in phones in 2005 and is currently available in the newest versions of the Playstation2. While most 3D contents are screen savers and games, 3D images of products might facilitate mobile shopping, 3D maps might facilitate navigation services, and 3D representations of data (which could provide the data on six faces of a cube) might facilitate business applications. 4. Expansion of Applications This section discusses how the technological trajectories are expanding the applications for mobile phones in six contents/applications. Several of these trajectories including Java and 3D rendering techniques will have an impact on all of the applications while other trajectories will have a much larger impact on some applications more than others. 4.1 Entertainment Games, ringing tones, screen savers, and other entertainment contents are already making the mobile phone a portable entertainment player and faster network speeds, increased processing power, Java, and 3D rendering techniques will reinforce this trend. The success of KDDI s vocal ringing tone service (almost than seven million 15-second 9

11 songs were downloaded in September 2003) suggests that lower packet charges will probably make the downloading of music and video on phones a common activity. However, it is the unexpected changes that are of greater interest and the mobile Internet will likely create its own form of entertainment just as the radio, TV, video recorder, and the Internet have done. Java-based and 3D screen savers became possible with the phones released in These screen savers have menus that enable users to manipulate the 3D images on the screen and raise pets like fish on other screen savers, an activity that was popularized in Bandai s Tamoguchi toys. Phones released in 2003 can activate these Java programs with an incoming call or mail message and the Java program can be customized for the caller. Further, it is possible to add music to these programs suggesting that the distinction between ringing tones, screen savers, and games are beginning to disappear. Even better processors that have lower power consumption may enable screen savers to be used as browsers where Java programs or contents are downloaded from a Java-based screen saver. The use of screen savers as an entry point for games is an obvious candidate with game providers offering a screen saver as part of the Java game. If the PC browser wars in the mid-1990s are any guide, a wide variety of content providers along with retail outlets and manufacturers may give away such screen savers as a way to guide consumers to their sites. 4.2 Mobile Marketing Phones have already become a new marketing tool for retailers and manufacturers due to the lower cost of sending mail to mobile phone users than traditional methods. More than 100 retailers and manufacturers are using the mobile Internet to send 10

12 discount coupons, conduct surveys, and offer free samples to registered users via mobile mail. For example, more than 100,000 Japanese redeem coupons with their mobile phones each month in Japan s leading video retailer, Tsutaya Online, and the total redeemed in Japan could easily exceed several million a month. New technologies like in-store bar code readers, short-range infrared, and Java offer additional ways for retailers to develop stronger relationships with these young people. For example, Jeansmate uses in-store scanners to read the bar codes displayed on the phone s screen in order to identify the customer and thus integrate its mobile and POS databases. Furthermore, when a customer purchases a product with or without a discount coupon, their name is displayed on the cash register screen including the status of their mail address. Jeansmate can register or update the customer s mobile mail addresses by inserting a special device into one of the customer s phone ports; this activates the mail function and automatically sends mail to the Jeansmate server. The acquisition of mail addresses enables Jeansmate to move more of its marketing activities from postal to Internet mail. It is also possible to use the phone as a point card for loyalty programs in place of magnetic or paper point cards. One method is to use a bar code as user ID and provide point information to customers when purchases are made. A second method is to use the phones infrared function to validate the user ID. Users download a Java program, which is activated with the infrared connection. One advantage of this method is that it facilitates two-way information transfers at the time of purchase or in mail messages. 4.3 Multi-Channel Shopping While it is possible to use the mobile phone by itself to purchase products 11

13 (US$ 270 million-market in 2002), the small screens and keyboards make it difficult to search for products, which is the largest advantage of finding books or travel services on the PC Internet. This is why most of the products purchased with a mobile phone are selected from personalized mail services that provide information on recent releases for a specific artist, genre, or authors. This severely limits the range of products that can be sold over the mobile Internet. The fastest growing segment of mobile shopping combines sites with magazine advertisements or worn by celebrities on television programs. More than 50 fashion-related magazines offer mobile shopping services and many of them believe that higher resolution cameras, bar code readers and faster processing speeds will drive growth in this market. As opposed to users scrolling through several menu screens or inputting a URL, they can use camera phone to photograph a URL or a bar code reader to read a bar code that is printed in a magazine and the phone s processor uses a pattern recognition algorithm to identify the URL. Television broadcasters are also attempting to integrate mobile Internet sites with their programs in order to provide paid information services or sell products that are used in the programs. Television broadcasters hope that some young women will be interested in purchasing the clothing and cosmetics that are used by actresses or in accessing information about the program or the program locations. Japanese firms have already begun linking these programs and sites to support the phones containing television and radio reception capabilities that appeared in late However, the bigger market is linking these sites with conventional radios and televisions and infrared techniques appear to have the best chance of success. 12

14 4.4 Navigation Lower packet charges, larger displays, and 3D rendering techniques may enable mobile phones to finally become an important portable navigation guide. The basic problem with current GPS devices is they use too much power for their inclusion in mobile phones. One alternative is to use network-assisted GPS, which requires less power, has less effect on phone weight and in some cases can be combined with base-station triangulation techniques that are useful when the phone is inside or very near a building. KDDI currently uses this approach with its cdma2000 services. The disadvantage of network-assisted GPS is that it requires a connection to the network, which increases the time it takes to acquire position data (typically 45 seconds) and cost more than $0.07 per connection at current packet charges. Monitoring an employee s location every 5 minutes for ten hours would cost almost $80 a day as compared to almost zero for a conventional GPS device. Of course, lower packet charges will eventually solve the cost problem. Larger displays and/or 3D rendering techniques are also needed. Current displays are too small for users to understand their location on the map. Although GPS and a compass function help somewhat, currently they are insufficient for effective map usage. This is why map services have less than 10% the number of subscribers and less than 1% the traffic as do train and bus information services. Restaurant search services, which charge restaurants to be on the site, also have far more traffic and income than the map services. 4.5 Tickets and Money Improvements in infrared and non-contact smart card technologies and increases in 13

15 processing speeds can enable phones to be used as tickets and money thus continuing the move from physical to electronic money that was started with credit cards 50 years ago. Credit card information is already being exchanged between phones and cash registers using the IrFM standard in Korea and such phones are expected to appear in Japan in More than 50 million non-contact smart cards are currently in use in Asia, primarily in transportation ticket applications. They are also used as money in convenience stores, principally in Hong Kong, and are now being used as concert tickets in Japan. Placing these smart card functions in phones will likely expand the existing applications for these cards. Phones will reinforce a single standard, which will reduce technological uncertainty and the cost of readers and may enable supporters of such smart cards to create a network of stores and users that can challenge credit card networks. Furthermore, faster processors in phones enable the use of biometrics (Wilson, 2002) and thus the verification of user identification, which will facilitate the purchase of more expensive items without the need for signatures or other identification. 4.6 Mobile Intranets The rapid diffusion of Internet-compatible phones and several technological trajectories have finally led to strong growth in business users. There are more than 500,000 subscribers to various mobile mail services that facilitate access to PC mail and several times more business people probably do this on their own or rely on their firm to provide the service. Furthermore, there were probably more than 150,000 business people accessing information in corporate databases from their mobile phones as of April 2003 and this number may reach one million by the end of

16 The largest applications in the accessing of corporate databases are delivery, maintenance, construction, and sales. Some delivery companies have replaced their proprietary handsets with mobile phones and enable customers to request delivery times on both their PC and mobile phone. Maintenance departments send information about the next customer to workers via mobile mail that often includes URLs for access of more detailed information. Construction companies send mail to their construction workers asking them to update their work status; the project management people use this data to set better schedules for materials and specialists like plumbers and electricians. Manufacturing companies allow their sales personal to access sales, price, and inventory information and input orders on their mobile phones. An improved user interface and standard software packages will drive further growth in the market. Larger displays, Java programs, 3D rendering techniques, and voice recognition, which are being driven by entertainment applications and other technologies like faster processing speeds, will enable business people to more easily access data. A key question is to the extent to which the standard software programs drive the emergence of a dominant design (discussed in Section 2) or are driven by some other dominant design for the mobile Internet like Java programs, 3D rendering techniques, or compatibility with popular desktop PC functions like Power Point. 5. Discussion This paper describes the key technological trajectories and their potential effect on the expansion of mobile Internet applications. These trajectories include the number of polyphonic tones, color display and camera resolution, Java program size, microprocessor speeds, memory size, and network speeds. While some of these 15

17 trajectories will fizzle out as user needs are satisfied, it appears that increases in Java program size, microprocessor speeds, memory size, and network speeds will continue for many years to come. Services with faster network speeds are expected to have lower packet charges and this may drive usage in a manner similar to what occurred in the PC Internet. Faster network speeds and to a lesser extent faster processor speeds enable the use of larger Java programs and better 3D rendering techniques, both of which can improve the user interface. These technologies are making the phone a portable entertainment player, a new marketing tool for retailers and manufacturers, a multi-channel shopping device, a navigation tool, a new type of ticket and money, and a new mobile Intranet device. Larger Java programs and 3D rendering techniques will have a large impact on all contents and applications and their first effect has been on entertainment. Bar code readers and infrared connections will enable retailers to strengthen their relationships with customers. Better camera resolution and faster processors will probably improve the integration of magazines and mobile shopping services. Cheaper GPS functions will improve the navigation capability of phones. These technologies will also change competition in the mobile phone market as dominant designs emerge for the mobile Internet. New industries like the mobile Internet are one big experiment where firms try various technologies, users learn how to use the products and services, and firms learn about what works and what doesn t work. This offers tremendous opportunities to those firms that participate in this experiment. The dominant designs that emerge from the initial domestic competition often become global dominant designs as other countries adopt them as opposed to re-inventing the wheel. 16

18 Table 2 summarizes types of emerging dominant designs in the Japanese mobile Internet. Some of them are or will impact on all of the applications discussed in this paper while others will only impact on specific applications. In some cases winners have started to emerge while in others it will take many years for the winners to be decided. In some cases this competition will impact on server software while in others the competition will also impact on competition between phone manufacturers. For example, the importance of display size and thus folding phones increased with the start of i-mode services in NEC had been making folding phones for many years while Matsushita was slow to recognize the change to folding phone. This led to a change in mobile phone market leadership from Matsushita to NEC in 2000, 2001, and Similarly, Sharp s faster introduction of camera phones led to increased market share for it in 2002 and further increases are expected in A larger battle may occur in the move from markup languages like c-html to programming languages like Java in Japan. For example, if standard Java programs emerge that facilitate an overall move by all content providers towards Java, the owners of these Java programs will probably increase their power in the market. The emergence of standard application processors, 3D rendering techniques, or even improved GPS functions or infrared techniques may also impact on the dominant design for phones and thus the shares of hardware and software manufacturers. The Japanese market is already impacting the European and U.S. markets via the success of i-mode and Vodafone Live! in Europe, both of which are based on Japanese technology. As these and similar services diffuse, many of the technologies that are being developed in Japan and that are discussed in this paper will be introduced in Europe initially via these services. The early start of the Internet in the US has led to 17

19 far greater success by US technology than US Internet service and content providers in foreign countries and similar things are likely to occur in the mobile Internet. As the winning dominant designs in the Japanese market are introduced in Europe and the U.S., this will provide large global opportunities for Japanese technology suppliers. 6. References Anderson P. and Tushman M "Technological Discontinuities and Dominant Designs: A Cyclical Model of Technological Change," Administrative Science Quarterly, 35: Bergeron, B. (2001). The Wireless Web: How to Develop and Execute a Winning Wireless Strategy, NY: McGraw Hill. Bijker, W., T. Hughes, and T. Pinch (Ed) (1987): The Social Construction of Technological Systems, MIT Press. Burkhardt, J., H. Henn, S. Hepper, K. Rintdorff, and T. Schack (2002). Pervasive Computing: Technology and Architecture of Mobile Internet Applications, NY: Addison Wesley. Bylund, M. and Z. Segall, Seamless Mobility with Personal Servers, forthcoming, Special Issue of INFO. Clark, K. (1985), The Interaction of Design Hierarchies and market Concepts in Technological Evolution, Research Policy (14), Dosi, G., (1982). A suggested interpretation of the determinants and directions of technical change, Research Policy 11, pp Funk, J. (2004. Mobile Disruption: The Technologies and Applications that are Driving 18

20 the Mobile Internet, NY: John Wiley & Sons. Funk, J. (2003). The Origins of New Industries: The Case of the Mobile Internet, the 2003 Best Paper Proceeding of the Portland International Conference on the Management of Technology (PICMET): Technology Management for Reshaping the World, July 20-24, Harui, R. (2003). NTT DoCoMo, Sony to Develop Smart Cards in Mobile Phones, Wall Street Journal, Online edition, October 22, 2003 Kalakota, R. and M. Robinson (2002). M Business: The Race to Mobility, NY: McGraw Hill. JP Morgan (2000). Wireless Data: The World in Your Hand, October 2, 2000, London. Marshall, A. (1920), Principles of Economics, 8 th edition, London: Macmillan. Natsuno, T. (2003), The i-mode Wireless Ecosystem, NY: John Wiley & Sons. Qualcomm (2000), The Economics of Mobile Wireless Data, Rohlfs, J. (2001), Bandwagon Effects in High-Technology Industries, Cambridge: MIT Press. Sharma, C. (2001). Wireless Internet Enterprise Applications, NY: John Wiley. Tushman, M. & P. Anderson (1986), Technological Discontinuities and Organizational Environment, Administrative Science Quarterly, vol. 31, Wilson, C. (2001). Get Smart: The Emergence of Smart Cards in the United States and their Pivotal Role in Internet Commerce, Richardson, TX: Mullaney. von Hippel, E. (1986). Lead Users: A Source of Novel Product Concepts, Management Science 32:

21 Table 1. Size of Japanese Mobile Internet in 2002 (Billions of Yen) Type of Market Firm or Market Size of Market Services NTT DoCoMo KDDI Vodafone Contents Total 150 Ringing tones 80 Screen savers Games Other entertainment Other contents Shopping Source: Firm home pages, author s analysis 20

22 Table 2. Emerging Types of Dominant Designs in the Mobile Internet Application Examples of Emerging Platforms Brand i-mode, Vodafone Live! General Browsers, micro-payment systems, Java virtual machines, application processors, external memory cards, Inter-phone and device communication protocols (e.g., Bluetooth, infrared) Entertainment Ringing tone delivery systems, music delivery systems, image processing systems, multi-player game platforms, client-side Java/Brew programs, location-based game platforms Mobile marketing Discount coupon delivery systems, integration of mobile mail and POS systems, point-card systems Mobile shopping Mobile commerce solutions, payment systems, bar code readers for phones, integration of site access with bar code readers, integration of radio listening and site access, integration of television watching and site access, Navigation GPS platforms, intelligent schedulers, global navigation services Mobile Intranet Security systems, business card management and exchange systems, mobile Intranet software for applications like sales force automation, maintenance, construction, home health care, or delivery Phones as tickets and Smart cards and systems, electronic credit cards, electronic money ticket systems 21

23 Figure 2. A Model of Industry Formation Technological Trajectories (from outside the industry) Industry Growth in a Specific Region Interaction between product designs and user needs Expansion of applications Emergence of technological sub-trajectories (driven by new industry) Effect of sub-trajectories on main trajectories Source: Funk 2003a 22