Enabling Technologies

It's the (App) Economy, Stupid!

MEDICIManaging Partner

In the world of m-commerce, vertical services were the first movers, and for the larger part, still continue to proliferate the industry. Carriers enabled subscribers to top-up accounts directly from their phones. The next step was for subscribers to procure digital goods and services beyond airtime through catalogs, in some cases fronted by the carriers through their walled-garden network and in other cases through third-party providers.

Banks soon started to leverage the mobile channel, initially for extending select banking services like checking balances and receiving alerts related to accounts and transactions, and subsequently moving funds between accounts. Given the risk, the first accounts to come online were credit cards, cautiously followed by checking accounts, and then grudgingly by savings accounts. Today, we can trade securities, access investment portfolios, and monitor our net-worth in the palm of our hands.

Service providers and retailers were relatively late to leverage the mobile channel. There were some early entrants in Asia (mainly in the travel sector), which successfully employed smartphones for ticketing applications. This led to experimentation across channels and industries, initially between service providers and banks, followed by carriers and service providers. Eventually, service providers started to focus more on mobile, first as another channel for advertising and promotion, and eventually as a platform for transactions and broader consumer engagement.

In the developing world, from distributing payments for government social programs to driving financial inclusion, mobile phones started to play an increasingly important role. In the developed world, applications sprung up centered around person-to-person payments – from equipping yuppies to split their restaurant bill, to enabling students to transfer money on campus, to bots fulfilling online orders, to digital gifting.

Some of the early over-the-air mobile applications were provisioned using the Java environment from Sun Microsystems, which is now a part of Oracle. These were still very early days of mobile value-added services, and the distinction between feature and smartphones had not yet been established. Ericsson’s R380, which ran the EPOC operating environment, was one of the early smartphones that got some traction in the marketplace. While there were many attempts all around the world by existing OEMs as well as upstarts, it was Apple’s iPhone that brought the smartphone to age.

We are now quickly marching to a point where we will no longer have feature and smartphones, but just smart and smarter phones, with the latter being packed with context and intelligence.

As we connect the dots between the evolution of the Java platform, the limited but early success of the R380, and Apple’s continuing progress, the common thread would have to be applications, or as we fondly refer to it: “apps.”

Java was the first environment at scale to truly facilitate over-the-air mobile application provisioning. The R380 was one of the first handsets with preloaded applications that started creating the distinction between feature and smartphones. While iTunes was the seed, the single most important factor that is responsible for Apple’s astounding success in the mobile phone industry has to be its application ecosystem. And now, Amazon and Alexa seem to be leading the charge.

While the means are important, losing focus of the endpoint can make the smartest of us feel stupid. In the world of politics, it’s always about the economy; in the world of mobile payments, it’s always about the apps.


Check out Mehul Desai’s August of Money.

Mehul Desai

MEDICIManaging Partner

Mehul Desai has spent over 20 years in the areas of intellectual property, product development, business development, strategy and international operations, focusing on ICT and related applications worldwide. Mehul has done pioneering work in the field of secure transactions for mobile phone users, evolving the Digital Wallet, to a Mobile Wallet, to a Lifestyle Container. Mehul co-founded C-SAM, Inc. in 1998, which was acquired by MasterCard Worldwide in 2014.