1. Not That Confidential 1 © 2006 Nokia Thesis Seminar / 2006-02-16 / MVe Instant Messaging Concepts and Positioning in Mobile 3G Markets AuthorMatti Vesterinen Supervisor Professor Heikki Hämmäinen InstructorDoctor Roland Wölker

2. 2 © 2006 Nokia Thesis Seminar / 2006-02-16 / MVe Contents Theoretical Frameworks Foundation of the study Industry scenarios Conclusions

3. 3 © 2006 Nokia Thesis Seminar / 2006-02-16 / MVe Introduction IM an extremely popular service in the Internet Mobile IM (MIM) still a niche service Voice services predicted to decline in the future Need for new revenue sources Problem: What will the future MIM industry look like?

4. 4 © 2006 Nokia Thesis Seminar / 2006-02-16 / MVe Theoretical Frameworks Five forces: Industry scenarios: Thematic interview Determine the causal factors driving them Make a range of plausible assumptions about each important causal factor Combine assumptions about individual factors into internally consistent scenarios Analyse the industry structure that would prevail under each scenario Identify the uncertainties that may affect industry structure Determine the sources of competitive advantage under each scenario Predict competitor behaviour under each scenario Threat of new entrants Bargaining power of buyers Bargaining power of suppliers Threat of substitute products or services Rivalry among existing firms

5. 5 © 2006 Nokia Thesis Seminar / 2006-02-16 / MVe Positioning of MIM Big four IM providers Yahoo!, MSN, AOL and ICQ have proprietary services SMS used in some cases as a bearer for IM and email Solutions created to make services more real time: SMS chat, push email

6. 6 © 2006 Nokia Thesis Seminar / 2006-02-16 / MVe Overview of Bearer Technologies CSD HSCSDGPRS EDGE WCDMA HSDPA WIMAX WLAN Internet services Video Conferencing File transfer Video sharing Browsing PoC Email Online gaming MMS WAP browsing Bandwidth increases Overall delay decreases

7. 7 © 2006 Nokia Thesis Seminar / 2006-02-16 / MVe MIM Technologies SMS solutions Usage expensive, work in every phone IP Multimedia Subsystem 3GPP standardised, not everyone follow the standard Wireless Village Large device base, lack of running servers SIP/SIMPLE Still to come, SIP used mostly so far for VoIP XMPP Standard ready, Google first big supporter Java clients Difficult to make compelling UI, widely supported Proprietary solutions Big four and VoIP players emerge from the Internet

8. 8 © 2006 Nokia Thesis Seminar / 2006-02-16 / MVe Industry Scenarios – Identifying Uncertainties List of uncertain elements of structure is constructed using Michael Porter’s five forces analysis:

9. 9 © 2006 Nokia Thesis Seminar / 2006-02-16 / MVe Industry Scenarios – Scenario Variables Scenario Variables are elements that are independent and are able to affect industry structure:

10. 10 © 2006 Nokia Thesis Seminar / 2006-02-16 / MVe Industry Scenarios – Causal Factors Identifying causal factors is the way to verify that the uncertain elements are not dependent elements. Causal factors will also help in determining the range of assumptions that will be made about each scenario variable.

11. 11 © 2006 Nokia Thesis Seminar / 2006-02-16 / MVe Industry Scenarios - Scenarios Interviews were conducted in order to find the most important scenario variables A scenario should be an internally consistent view of what future industry structure could be Terminal support NoYes Interoperability No12 Among mobile operators 3 Among Internet communities 45 All6

12. 12 © 2006 Nokia Thesis Seminar / 2006-02-16 / MVe Industry Scenarios - Analysis Each of the six scenarios were analysed in the same way:

13. 13 © 2006 Nokia Thesis Seminar / 2006-02-16 / MVe Discussion Geographical location of the market Phone price categories Evolution paths Sustainability Persistent connectivity Minimal bandwidth Charging models Terminal support NoYes Interoperability No12 Among mobile operators 3 Among Internet communities 45 All6

14. 14 © 2006 Nokia Thesis Seminar / 2006-02-16 / MVe Conclusions The most important scenario variables affecting the future MIM industry: Terminal support Interoperability Role of big four likely to increase in relation to the amount of interoperability However, cooperation with Internet players is a source of competitive advantage for mobile operators under certain industry structures Service usability and competitors highlighted as well Resulted scenarios can be used for constructing more specific strategies More extensive research by choosing more or different scenario variables How revenue from other mobile services, especially mobile messaging services, would be affected under each of the six scenarios

15. Not That Confidential 15 © 2006 Nokia Thesis Seminar / 2006-02-16 / MVe Questions? Thank you!

16. 16 © 2006 Nokia Thesis Seminar / 2006-02-16 / MVe Industry Scenarios – Analysis

17. 17 © 2006 Nokia Thesis Seminar / 2006-02-16 / MVe Industry Scenarios – Analysis

18. 18 © 2006 Nokia Thesis Seminar / 2006-02-16 / MVe Industry Scenarios – Analysis

19. 19 © 2006 Nokia Thesis Seminar / 2006-02-16 / MVe Industry Scenarios – Analysis

20. 20 © 2006 Nokia Thesis Seminar / 2006-02-16 / MVe Industry Scenarios – Analysis

21. 21 © 2006 Nokia Thesis Seminar / 2006-02-16 / MVe Industry Scenarios – Analysis