Designing viable business models for context-aware mobile services

Abstract

Technologies of 3G and beyond open up new opportunities to develop and commercialize context-aware services that utilize information like user location and social context. Although initial expectations were high, the adoption and diffusion of context-aware services have thus far been limited. Existing literature points to failing business models to explain part of the disappointing uptake. However, most authors focus on the factors that explain failing business models rather than providing practical design issues to improve business model viability. This paper fills this gap by specifying generic mobile business model design issues for the domain of context-aware services. As such, we provide a well-grounded, holistic overview of design issues that are the most critical in developing viable business models for context-aware services, based on interviews with eighteen esteemed practitioners and academics in the mobile services domain, at CEO and Professor level. Our findings indicate key challenges in the service domain (i.e. defining value adding elements, specifying target groups and generating trust of consumers in the service), the technology domain (i.e. integrating emerging technology platforms and safeguarding privacy and security), the organizational domain (i.e. division of existing and new roles in complex value networks, openness of the value network towards new service providers and governing the activities in the value network) and the financial domain (i.e. pricing; dividing costs and revenues and combining multiple revenue models). Our research has scientific implications, because it applies generic mobile business model theory to the context-aware services domain. In addition, we provide practical clues to practitioners with regard to the design issues on which they should focus while developing more viable context-aware business models.