Three Trends Shaping Mobile Computing

Your mobile device is now a full-fledged cash register, among other trends shaping mobile computing.
Posted December 29, 2011

Mike Elgan

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As the dust settles on the holiday shopping season, three mobile trends have suddenly become clear: Mobile devices are becoming point-of-sale devices, Silicon Valley will control them and companies will use other products to drive adoption of mobile eCommerce.

Trend #1: Phones and Tablets Are Cash Registers

Why would an online catalog design, make and sell a touch tablet? Have you ever wondered that?

Amazon.com started out as an online bookstore. Later they expanded into just about every category of product that could be sent by mail. Later still, they moved into selling downloadable content.

That sounds like a pretty straightforward business. But years ago, Amazon did something radically different. They set up a small company called Lab126 to design consumer electronics gadgets.

Following the pattern of their catalog, the first hardware device, the Amazon Kindle, was all about books. Their latest (and greatest) piece of hardware is the Amazon Kindle Fire, which you can use to buy anything Amazon sells, and “consume” any downloadable content sold by Amazon.

The clear and obvious reason for this radical departure from the core business model is that it's not a departure at all.

In all its prescience, Amazon knew that eCommerce would evolve from one in which people would use catalog-neutral devices, like PCs, to catalog-biased devices, like the Apple iPad. In order to keep people buying, Amazon had to offer its own device in this new world.

The new world of buying things is online. And the new world of buying online is via phones and tablets.

And that's why Amazon has tablets.

It's not surprising that an online catalog has tablets. What's surprising is how few tablet makers have online catalogs.

IBM Benchmark announced this week that of all online sales taking place on Christmas Day, 13.4 percent of them were made from iOS devices like iPhones or iPads. About 5 percent were made from Android devices.

The company also found that overall online purchases increased by 16.4 percent over last year.

Next year, all these numbers will be vastly higher: More commerce goes online; more online commerce goes mobile.

So while Apple and Amazon make billions mobile devices, they are viewed (falsely) as competitors to other phone and tablet makers, who will scrape for crumbs selling just the hardware itself at razor-thin profit margins.

And Mobile eCommerce isn't just an alternative to brick-and-mortar commerce. The two are merging.

Apple's iPad is the fastest-growing point-of-sale cash register. Restaurants, coffee shops, and mom-and-pop stores of every description are embracing the iPad, plus third-party solutions like Square, as a replacement for their old, proprietary cash registers.

Google Wallet seeks to provide a mobile-phone alternative to credit- and debit-card purchases.

Note that both iPad cash registers and Google Wallet are each platform-specific.

And this is where the future of revenue is for phones and tablets: Micropayments for purchases, both online and retail, as well as app revenues.

The phone and tablet, in other words, are cash registers you carry in your pocket. And the platform and handset makers, currently Apple, Amazon and Google, primarily, are in the seat of power as both retail kingmakers, and also as the companies that can get rich by taking a cut of everything people buy.

Trend #2: Silicon Valley Über Alles

Another interesting trend is the rise of Silicon Valley in the mobile space.

Apple and Google are gobbling up the market for handsets and tablets. These companies are within walking distance from each other, yet together own 82 percent and 93 percent of the US markets for smart phones and tablets, respectively.

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Tags: mobile, mobile computing

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