Wednesday, February 27, 2013

No pause to think in a world that's in touch while on the go

I confess to a having an old fogey's ambivalence towards mobile phones. There are times when it suits me to keep in touch, but most of the time I don't want a phone taking over my life - or even interrupting it. And I figure I'm old and odd enough to get away with rarely using one.

But of all the amazing things going on in the digital revolution - the spread of computers, the internet, the declining cost of telecommunications - nothing is more remarkable than the growing ubiquity of the mobile.

According to a report by Ric Simes and John O'Mahony of Deloitte Access Economics, ''it is undeniable that mobile telecommunications are altering the way the world conducts business''.

Now, the report says, everything digital is going mobile: software, the internet, the cloud and social media.

What are young people doing when you see them incessantly fiddling with their phones? They may be playing games, but they're more likely to be checking emails or reviewing their ''twitter feed''.

Do you realise that we 23 million Australians now use more than 30 million mobile services? As well as phones, this would include tablets such as iPads and the dongles that link laptop computers to the internet.

Because the sales of the mobile telecommunications industry have largely been driven by increasing subscriptions, this penetration rate of well over 100 per cent means the industry's sales are faltering. Last financial year they actually fell by 1.5 per cent. The report predicts no sales growth in real terms this year, with a modest recovery in 2013-14.

But just because sales revenue has stagnated doesn't mean the use of mobiles isn't continuing to balloon. In 2011, mobile broadband traffic averaged 8.8 petabytes a month. Cisco Systems predict this will grow by 68 per cent a year until 2016.

It's worth noting that if industry revenue is stagnant while usage continues to explode, the use of mobiles is becoming cheaper.

It may help make sense of all this to know that, according to Ericsson, voice calls now make up only a quarter of the time people spend on their mobile devices. In June 2009, less than 10 per cent of people used the internet via a handset; three years later, almost a third did.

Old fogeys like me think email and mobiles are a very mixed blessing in terms of the efficient use of our time, but the report argues valiantly that they increase the productivity of businesses.

Mobile technology can improve the productivity of employees by allowing communication on the go. Workers who are travelling can be in touch with others in the office by making calls as well as by sending and receiving emails. They can use their mobiles to access information on the internet.

Mobiles allow workers to make more productive use of down time. Time previously underutilised because of lack of access to a desktop computer is no longer so. Smartphones and tablets can be used to review documents and make changes without being in the office.

Some applications (or apps) can increase productivity. ''Voice notes'' allow people to store audio information, calendar apps help with time management and various apps allow you to streamline repetitive tasks. And as well as increasing the productivity of labour, mobiles can make capital equipment more productive. Desktop computers can be replaced by laptops or sometimes smartphones. Employees can be allowed to bring their own laptops or mobiles.

If mobiles and laptops allow more people to work at home, businesses can save on office space. Retailers who sell more over the internet can save on the cost of bricks and mortar, or store more of their stock in warehouses rather than city shops.

To its credit, the report considers those implications rather than ignoring them, as economists and business people tend to. On the plus side, it notes that, for the individual, mobile devices offer not just communication but ''rich digital experiences on the go'' - photos, music, games, location-based services (such as getting directions to a place), maps, the internet and the millions of features offered by apps. And all this fits in your pocket.

But being always contactable can make you feel ''always on''. And Hugh Mackay, the social researcher, offers a more sceptical perspective: ''You have this sense of continuous connection; it's like being in a strand of a web which is continually vibrating. Part of this feeling of being in a 'cyber crowd' is illusory, but some of it is real; it is important to note that some of this tribalism is purely cyber . . .

From just two guys at rented desks to a $715 million sale to Facebook, a second wind on Android and a mess of privacy scares, Instagram today announced 100 million people use it every month to share the way they see the world. The startup hedged its bets by being acquired just as it expanded beyond iOS, but despite what it could have sold for now, there’s no disputing Instagram’s success.

In a heartfelt blog post that smooths over the rough patches, co-founder and CEO Kevin Systrom explains the journey to building an app that’s created “a world more connected and understood through photographs.”

The untold story is that Instagram made a tough decision right after its April 3rd launch on Android. Before that it had 30 million installs on iOS. Whether it would succeed outside of the design-focused iPhone was a gamble. It could have flopped, attrition could have set in, and it was still small enough to be vulnerable to competitors. So despite racking up 1 million new users in the first 12 hours, there was a lot to lose. $1 billion (at the time) in cash and stock from Facebook for a company with just 13 employees was too good to pass up, so it sold.

If Systrom had foreseen what would happen next, he may have held out longer. The Android app maintained its sprint, and the iPhone version continued to pick up steam. Even without much help from Facebook, and in fact despite Facebook’s own competitor Camera, the Instagram juggernaut could not be stopped.

At over three times as many users now as when it sold, and seemingly beyond quick disruption, would Instagram have sold for $2 billion or even $3 billion today? Would anyone have been willing to pay that? Remember this was when fervor was frothy for the coming Facebook IPO. Social companies still saw going public as a lucrative option.

But Systrom chose to become a made-man (and make made-men out of many of his employees), rather than roll the dice. He chose greater impact by aligning with the world’s premier social network over total control. He still runs Instagram somewhat independently from Facebook, so he may be getting to have his cake and eat it too.

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