OP3 founder discusses challenges facing camera phone barcode business

As an adjunct to the brief item I just wrote about OP3, a systems integrator for camera phone barcode products and services, Dennis Hettema, the founder and chief executive, wrote an article about the challenges facing the development of the business that he terms "ScanCommerce."

Here, with some editing by me, is Dennis' information:

Read a barcode with your camera mobile phone and instantly receive product information, price comparisons, related offers, manuals. You name it!

By simply pointing your camera at the barcode, the application in the phone automatically recognizes the barcode, deciphers it and automatically connects you to the correct online location.

OP3 is the first mCommerce agency in the world fully focused on ScanCommerce (also known as direct connection technologies).

Apart from the obvious challenges (such as bad camera optics and low penetration rates of compatible devices), our focus was born from all the challenges we find in this exciting business.

Some examples of challenges

If a large handset developer decides to take on a standard in barcode scanning...

* Will their market share be enough in order to convince B2C companies to implement a scancommerce channel? (Assume approximately 35% market share. How many devices will be outfitted with this technology and what market share will that be?)
* How do customers of XYZ Corp. get connected to the right database? (If the application comes pre-installed, does that mean that the business cases are pre-defined as well? If so, how is that channel administered?)
* How will XYZ Corp. shape its application so it will be available on other camphones as well? (Will the marketing or IT department have to contact every mobile phone developer separately?)

If XYZ Corp. wants to enable the ScanCommerce channel...

* What is the best way to push the application to the end users? (Or is there another way to achieve an installed base in a desired region?)
* Is there printing involved? Which standards need to be used for this?
* How is payment handled? (Is payment desired?)

Pure technical challenges...

* Camera mobile phones do not have the same “standards” as PCs, so how much effort is involved to roll out the application across all compatible devices?
* How do you handle the difference in optics between otherwise identical devices?
* How do you make the backend work?

We work together with companies involved in every link in the ScanCommerce value chain and we constantly look for new companies to work with. We believe that 2005 will become an exciting year where many applications will be introduced.

Comments

[Alec Gianakis]

Dear Uri L:

As a developer of cam phone applications with 3 years experience developing an integrated application for retailers I have seen the reaction of customers using bar code "capturing" with a cam phone.
As long as you understand that the application has to follow the KISS principle (Keep It Simple stupid (please excuse my language))
First the use of the application does not have to require more than those 30 seconds taken to learn how to use the camera.
Second , getting involved with the program should be absolutely intuitive.
Third , do not saturate the screen.Graphics have to be clear an easily read , by even people with short sight probelms.
Fourth, do not go over the limited tolerance level with any sort of Adv & Mkt proposal
Five , make sure the user is tempted to use the system again.
As long as you have in mind these basic principles , then you will have a killer application with economic/Business results.
Needless to say , today we are talking about a minority of users who have cam phone , but these numbers are growing tremendously day by day. So in the very short future , your pool of users will be a great mayority .
Our experince in the supermarket industry through a batch purchasing system , proved that "scanning" is almost natural to all shop goers, nothing new , for they have been seeing cashiers doing it for them , for ages.
With their phones , they already now what to do, as long as you emulate the procedures and results to them.
What you basically end having is a tool capable of :
One to one Mkt
Just in time ADV (co/cross marketing , co/cross branding)
On line CRM
With one prime target to attain:
Increase the mean avergae value of each ticket!!
I have hours of video footage showing actual people in real stores and at homes operating phone cams PURCHASING and not only entertaining themselves , down loading MP3 or trailers , ....They are doing business and getting cherished services for their money.
This combination tool of phone cam and bar code capturing applied for retailers is second to none.

Regards
Alec

Note : Alan , let me know if this is OK.
Thank you once again.

[Dennis]

I think the killer is the machine to machine part of the application. At current it takes long to type in a url on your mobile device (even a simple one such as www.op3.com). Instantly connecting to any online location is the killer part of the application I think. The service that's placed behind can be as diverse as current barcode applications and more.

[Uri L.]

Indeed a very interesting emerging service.
In the end of the day, it "slightly" demands user activity - to spend 30secs with the phone, and to know how to operate camera etc.

Obviously something that might have some projections on educating users.

But the questions is, where's the "killer" factor in it ? I kinda haven't grasped it yet... :)

I'm a retailer - I want to use all the in-store promotion/guidance trick & tips to the maximum. Could this interrupt ?

Here's another PR regarding NeoMedia's soft in Nokia phones:

http://www.12snap.com/uk/press_lounge/upload/040427173312.pdf