Welcome to the Summer Edition of the Airwide Newsletter, we hope that you are enjoying the season and all it has to offer!  As we move through the summer months, the mobile app phenomenon continues to heat up the industry as operators and consumers alike learn to navigate the ever-expanding universe of mobile applications available. 

Indeed the challenging economy and the app explosion have changed all the old rules so in this issue of the Airwide newsletter, we’ll explore the critical questions operators face as they explore investment in mobile applications.  We’ll also take a look at what the mobile app momentum may mean in the context of the pre-paid wireless market.  Finally, we’ll update you on recent and continuing developments related to mobile security, spam and other forms of mobile abuse threats.

IN THIS ISSUE

Carriers Face Critical Questions As They Explore Investment in Mobile Applications

By Airwide Solutions

With the race for mobile applications heating up, device manufacturers, application developers and carriers are looking to plant a stake for their piece of the App Store market. Hopes are high for mobile applications to account for a significant piece of wireless revenue (as much as a 30% cut of app sales anticipated by Vodafone in an announcement this summer) and consumers are hungry for more options, apps personalized to their own preferences, and a seamless extension of their “web” life onto the mobile channel. However for App Stores (whether they be from Apple, RIM, Nokia, Vodafone, or others) to be a mainstay within the consumer market, operators MUST play a part in ensuring apps can be accessed by the mass market despite handset fragmentation and existing limitations imposed on consumers without high-end smartphones. At the end of the day, operators can overcome many of these limitations current App Store models present by improving infrastructure; infrastructure that allows them to roll out intelligent, service-driven applications that meet the clear demand from consumers.

According to a recent survey conducted by Airwide Solutions and mobileSQUARED, operators can and want to have a defined role in the applications ecosystem, enhancing the app experience with unique operator and network assets. But to do that, Airwide offers a set of critical questions carriers must be willing to answer if they are intent on jumping into the apps game. If they are, the door is wide open.

1. How do operators negotiate a revenue share with application developers to make an app store worth it?
   Operators should think outside the box when it comes to mobile applications; find a way to layer services on top of third party apps for maximum revenue potential. Developers want viable entry points to subscribers and realize it’s ultimately the pathway to success, but carriers shouldn’t be afraid to break away from traditional service and content delivery models to make the collaboration with developers work.
2. Is the App store model open for debate?
   Carriers talk about replicating the app store model, but can that be done when the model is still in its infancy? The reality is there is no set model and no right way to go about it. The market will continue to see the model evolve over the next few months and years, and carriers should focus on enhancing app stores, rather than reengineering them.
3. Should all apps be available to all subscribers or should carriers target apps for enterprise users and apps for consumers differently?
   A successful app store will be one that offers innovative applications to users no matter what their device or what their function. App offerings should not be limited to business (i.e. smartphone) users. Carriers must establish a model that offers device agnostic service-enhanced apps.
4. How much is too much?
   Carriers shouldn’t underestimate their customer base. While there is a lot of competition among carriers, device manufacturers and developers to hook the subscriber on an initial app sale, all customers want the same thing- ease-of-use, uncomplicated purchasing agreements, and most importantly personalization and customization. Flooding the web/consumers with new app options is only as good as the services delivered with them and that is the differentiator carrier-driven app stores offer.
5. Does it all come down to trust?
   Carriers have an incredible advantage in the app store business to leverage the trust and loyalty of subscribers. Recent reports suggest that while Apple’s App Store saw a record number of downloads, most free apps eventually get deleted after the first download. There’s no staying power. Factor into that there is little tying a subscriber to third party apps and there is a very tenuous basis for repeat purchasing. Carriers, on the other hand, with long-term relationships and a trust-factor unlike that on the Web, can bring a new level of engagement between consumers and the apps they purchase. This is good for everyone.

A take on Sprint deal:
The Future of Prepaid Rests in Intelligent Services

By Airwide Solutions

With the recent announcement that Sprint Nextel has agreed to acquire Virgin Mobile USA, once again we are reminded that the prepaid market is a much more important market than many people realize. Worldwide, at the end of 2008 prepaid subscribers represented 72% of all subscribers (GSMA Wireless Intelligence). The prepaid market is a challenging one, however. In general, prepaid subscribers have less disposable income leading to much lower ARPU. In addition, given the lack of a contract, churn for prepaid subscribers is much higher (easily 3-5 times higher). While cost control is a critical component for prepaid success, given the huge financial impact of churn on a prepaid operator or business unit, the ability to rapidly deploy innovative services that keep fickle prepaid customers from leaving generates enormous financial dividends to a prepaid operator or business unit. 

However, rapidly deploying innovative services is easier said than done. But there is an option for operators. For example service delivery and innovation technology such as our Open Services Framework provides the technical platform for operators to do rapid service creation and introduction of sticky services like mobile advertising, social networking, security or mobile money transfers. And just as importantly, these services can be enhanced with operator capabilities.

It’s great to see that carriers like Sprint see this too and are pursuing a similar strategy (in this case, Sprint’s OpenAPI).  The benefits are clear. The Virgin Mobile USA acquisition brings not only prepaid customers and distribution channels, but also a marketing team that has deployed many innovative end-user services designed to attract and keep customers. This combination of open platforms and a marketing plan that envisions and incorporates attractive services will not only support Sprint's prepaid initiatives but also benefit its contract business.

Bottom line - the future of prepaid is bright with smart platform and service strategies to go the distance with subscribers

Airwide Featured in BBC Spotlight on Mobile Applications

Phil Stubbs, Director of Products for Airwide Solutions recently appeared in a BBC Click feature on the evolving mobile app situation. 

Click here to view the piece..

New demonstration of SMS hacking shows smartphones vulnerable to attack – comment from mobile messaging specialists, Airwide Solutions

At a recent Black Hat Cybersecurity Conference in Las Vegas – and as reported by Andy Greenwood at Forbes and Robert McMillan of IDG – researchers have demonstrated how they can potentially ‘hijack every iPhone in the World’ using falsified SMS and MMS messages.

The messages, which threaten iPhones, Windows devices and other smartphones, can give a hacker complete power over any of the devices’ functions, including dialing the phone, visiting Web sites, turning on the device's camera and microphone and sending further messages to enable the hijacking of a massive network of smartphones.

This is the latest in a string of recent, high profile mobile security scares that demonstrate the vulnerability of high-end smartphones to malicious attacks that endanger users’ private data. Indeed in another similar announcement recently, research showed that nearly one out of every 63 smartphones powered by the Symbian operating system is infected with some form of malware.

Airwide Solutions, believes that the most effective solutions to combat attacks of this nature are those deployed by mobile operators.

“The data being carried by smartphones is increasingly making them more valuable than many computers – and this is making smartphones hugely at risk to security threats.  SMS and MMS messages are the easiest way for hackers to reach and infiltrate a device, and it falls to operators to employ mobile security solutions to protect their customers from this danger.

Many people assume that the PC security model of software downloads and firewalls are the answer. However, with the variety of handsets available this isn’t an effective option on its own. Adding to the complexity is the range of communication methods that can be carried out on a smartphone - email, SMS, MMS, web and WAP access - and along with them come a whole host of mobile security threats such as mobile spam, viruses and phishing.

Handset based solutions are also limited as they only protect a tiny number of mobile users. Also, with mobile devices constantly being upgraded and replaced with higher specification devices, security software which is added is often quickly outdated.

The most effective answer lies with an integrated approach including education to avoid subscribers opening potentially dangerous messages as well as handset based solutions and those deployed on a network level. However, of these approaches the most successful single method are solutions deployed across the network as they are both more controllable and easily upgraded. Currently many network operators voluntarily police potential fraudsters but as messaging services continue to grow and become more complex, networks need a comprehensive range of features such as anti-spam and virus filtering software, EIR systems and blacklisting, anti-spoofing and anti-flooding technology. Using a variety of mobile security technologies including anti-spam, anti-spoof and anti-flooding, along with next generation gateways operators can detect abnormal patterns in messaging traffic, confirm legitimate senders, filter content and block suspicious messages. 

With appropriate security measures in place mobile operators can protect their subscribers and their networks from potentially damaging security risks. As the rise of applications and services continues, they can also protect their revenues without fear of jeopardizing them through malicious attacks. Once customers feel assured they will not receive a barrage of potentially dangerous unwanted messages for downloading an application, they will feel more confident about downloading content and services in the future.”