Published on July 9, 2007
Google, Yahoo and Skype are more compelling for users. As customer appetites for social data and video services spike, wireless operators offer more "all you can eat" pricing for high-end data packages. Social networking applications initially are preloaded on many mobile devices and become downloadable.
In the short term, wireless users are unlikely to plunk down between US$5.99 (Bt200) and $9.99 per month for mobile television services. Instead, look for per-view or per-minute pricing for "sneaking", a consumer tendency to watch key minutes of a sports event or drama while engaged in another activity.
Sneaking leads to more regular viewing, and within three to five years, mobile television becomes an indispensable service. Broadcast television is the primary driver of revenues and consumer adoption, but peer-to-peer video gains interest, too.
Multi-function devices become cheaper and more versatile.
Intense competition and margin pressure will continue in the handset market forcing prices of third-generation (3G) handsets below $90 and making them affordable for a wide range of users. Seeking to replicate the success of camera phones, device manufacturers will produce more multi-function units with music-playing, location, video and other capabilities. These lower-cost, multi-function handsets help wireless operators increase traffic and margins.
However, like swimming pools at hotels, some functions, such as music, are "must haves" used only by a few. Still, it's estimated that 20 per cent of all handsets sold in North America will be application specific - built for a usage proposition, such as music or video consumption or business productivity. WiFi handset capability could become the Trojan horse that allows Internet companies to bypass revenue from mobile subscribers.
GPS is the location technology of choice for the wireless industry. Handset manufacturers will continue to push GPS-enabled handsets as the technology evolves from popular in-car satellite navigation systems to a broadly accepted feature in wireless phones.
With Nokia having launched its first GPS-enabled handsets early this year, and bandwidth available to support new multimedia services, location-based service providers will build critical mass. Since there are 10 to 20 times more mobile phones sold than any other consumer-electronics device, wireless is a huge driver for GPS adoption. That's great for users and handset vendors, but the benefit to operators isn't clear.
AOL, Yahoo! and Google multimedia platforms challenge IMS.
As multimedia service platforms emerge, Internet service providers will build their own media architecture. That poses a risk to telecom operators adopting an IP Multimedia Subsystem (IMS) approach. However, IMS needs a flagship application and develops slowly until entrepreneurs and venture capitalists create innovative IMS services as they did with the Internet.
Together, China and India will connect more than 10 million wireless customers per month in 2007, creating a subscriber base of 200 million customers. By the end of the year, China will finally start issuing 3G licenses. Wireless technologies are developed and deployed first in China and India, rather than Europe and North America as in the past. The result is a significant shift in industrial influence. Although Chinese infrastructure vendors may be viewed as the "Wal-Mart of wireless", that's more perception than reality.
Chinese manufacturers make rapid technology improvements and aim for long-term strategic advantage. Expect intensified focus to ensure a strong Asian influence in the 4G market.
Mobile advertising breaks loose. Major brands shift from basic SMS marketing to more sophisticated multimedia advertising. RBC Capital Markets expects mobile marketing revenues to balloon from $45 million in 2005 to $1.5 billion by 2010. With the technological ability to target and measure the effectiveness of mobile advertising, brands are more strategic in their approach. Operators under increasing price pressure will set limits on current handset subsidisation.
Brands take up the slack, subsidise handsets and services for target demographics, and take direct ownership of marketing channels. Rich 3G content and video services, and accuracy advancements in GPS-based location services, deliver further value to brands targeting existing and potential customers in innovative ways.
This year, mobile will make headway against fixed broadband operators, who have dominated Internet and cheaper voice service provision in the home. WiFi remains the primary wireless access technology. Low cost femtocells and combined WiFi/High-Speed Packet Access (HSPA) routers emerge as attractive alternatives to VoIP over WiFi. The fixed operators may be strengthened by WiFi capabilities in consumer electronics devices - set-top boxes, game consoles and MP3 players - that enable cost-effective content downloads. However, innovative business models for HSPA will give mobile operators a real way to fight back, particularly in emerging markets.
Put strong security measures in place - this could be the year that hackers really start paying attention to millions of wireless devices, the growth in mobile data usage, and vulnerable points between mobile and fixed networks.
CIOs consistently cite security as their top concern in extending network access to wireless devices. Attacks, viruses and data security now exceed device loss or theft as concerns. Emerging services, such as VoIP and mobile payments, provide additional challenges. Vulnerabilities directly affect the bottom line, corporate image, regulatory compliance and competitive advantage. In the consumer segment, seamless mobility, off-portal content, IMS and convergence evolution continue to create new business needs for end-to-end security.
Enterprises can't resist the convenient, reliable, attractively priced, bundled mobile products entering the market. Corporations will switch from phones to mobile computers for transactions, data collection and messaging for a wide variety of employees. Many voice communications processes, such as order placement and delivery notifications, dispatch operations and remote asset monitoring, will continue to shift to wireless data to increase information access and field transaction volume across organisations.