Friday, March 31, 2006

Two Interesting Mobile Ideas

Today's Economist has an article on Hotxt, a company that offers a service seeking to replace SMS. Their idea is to install what seems to be J2ME client software on the phones and use GPRS for sending messages. Since GPRS costs significantly less per 160 characters of content than traditional SMS, they can offer messaging at significantly lower cost - an interesting proposition for teenagers, the most heavy texters of all.

What a nice arbitrage idea: The technology seems almost trivial, but if these guys get the marketing right, they may as well succeed. More importantly, they need to avoid getting blocked or disintermediated by the mobile operators, who would be more than happy to keep their >90% margins on SMS.

Earlier today at ETH, I saw a fantastic demo of barcode recognition on cell phones. The main difference to existing approaches was that it actually worked.

Once this is available on everyone's consumer cell phone, it will be the greatest thing since sliced bread. Barcodes - unlike RFID tags - cost nothing to make and are already on every article sold in every supermaket. Many interesting applications suddenly become possible: Imagine you're in a DVD store and really want to have that latest George Clooney movie. The price tag seems rather excessive, so point your cell phone at the barcode, hit a button, and receive a price quote and a short review from Amazon.

Surely, some existing price comparison sites will want a piece of the action. As so often, my guess is that the winner will be whoever makes the application extremely easy to install and returns results pages with high-quality information. Everyone will be happy - except for the stores, who may start putting black stickers over barcodes for their high-margin goods.


bálint said...

I am pretty pessimistic about Hotxt. Although purely theoretically it sounds nice, they are completely at the discretion of the network operators. And why would I want to wait until a java app starts on my mobile before I can read my messages? Maybe if they offer more than just messaging, somehow that users really have a special reason to go and start a j2me application. And what might be even worst, is that recipients need to be hotxt users, as well. And if they start supporting sending "to sms", their costs again are set by the network operators...

I think all what Hotxt can do, is to push the network operators in the direction of fair pricing, but I would be surprised if it would be to text messaging what skype turned out to be for phonecalls.

Gabor said...

Good thinking; I agree. I guess Hotxt is really aimed at hardcore SMS users (= teenagers). These kids already spend a large amount of time typing text with just 12 keys! So I doubt they'd mind the extra inconvenience of having to start a J2ME app first.