- IN THIS ISSUE:
- * Market Trends for 2004
- * What Will Not Take Off in 2004?
One year has passed again and the time has come for me to throw in my own sentiments for 2004. The mobile industry has transformed itself from the bubble economy into doing business like everyone else - without really knowing how. The US wireless industry is spending more money in advertising than Pepsi, Coca-Cola and the beer industry combined. With VOIP leading the way, money is starting to flow through their fingers on the voice side and middle-aged engineers and managers are trying to find new value for the young generation from data services. Is this the business to be in? I am not saying I know all the answers but I do have my opinion.
I would like to use this opportunity to tell you about my good experiences with a new social software startup called LinkedIn (www.linkedin.com). It is one of those sites that enable you to build a controlled professional network and get introductions to people you might need to know. I was first skeptical towards the value it would provide versus spam and other problems it might bring along. Those fears have proven to be unfounded, LinkedIn has allowed me to significantly strengthen my consultancy sales funnel as well as research contacts to do my projects faster. I am now at 365 direct contacts and my accessible network within ‘three degrees’ is over 56,000 individuals all over the world. Currently 4,000+ Finns from my native country Finland have joined (meaning the entire wireless startup scene over there). As a reader of MEOW!, I encourage you to join and send me an invitation so that we can connect and I can offer you visibility to my network.
Best regards,
- Tapio Anttila
- tapio@anttila.net
MARKET TRENDS FOR 2004
1) Renewed ‘techno-optimism’. Looking at what was available for a consumer for Christmas 2003 gave a good sign as to where we are heading: lots of new device categories in consumer electronics are maturing and fighting for consumers’ attention. This is both good and bad for the mobile industry: consumers might spend more easily but the competition for their attention is fierce: shall I build a home network, buy a PVR or invest in a family plan for mobile services? Why would I budget my kids’ mobile entertainment budget?
2) Broadband Internet is becoming real. Looking at even ‘weak’ content markets like Finland it is clear that ISPs are understanding the importance of broadband content. This will help ignite the market - there is a lot of pent-up demand since folks were postponing their Internet access investment when budgets were tight. This is another spending item that competes with mobile and at the same time it increases the potential of the PC-centric cross-media use of multimedia (read: Microsoft).
3) Smart phones will not be the big sellers - yet. Too expensive, too bulky, the smart phones will not live up to the hype in 2004. The real winners will be small form factor ‘almost smart phones’ such as the Nokia 6230, phones with a mature platform and a solid set of features and applications available. Generally speaking, application distribution for smart phones is still all too under-developed to earn consumers’ interest.
4) Camera phones will get a lot of traction but MMS will still be slow to start. As I witnessed at the IBC MMS show in Paris in November, Italian operators TIM and Wind are getting some significant traction with smart marketing, pricing and content strategies. Application-to-person MMS is needed to jump-start the MMS market as the device base is still very small and interoperability problems persist. The success of person-to-person MMS will require the emergence of a new social language that exploits the multimedia capabilities of mobile devices - we are not there yet. This changes will be driven by user innovation rather than by marketers.
5) Music industry will earn some quick wins. I attended the excellent MobileMusiCon show of Mark Frieser in Miami in November. The entire music industry was there and it is heart-breaking to observe the sincere attention the industry is paying to the mobile business opportunity. As Michael Nash from Warner Music put it “mobile music could well fill up the $10bn revenue loss the industry is suffering from“. However, 2004 will not see the big picture with music downloads or streaming come true yet. The ringtone business will continue to prosper despite doomsayers and the ringbacktone market will explode. The real winners understand the need to combine music delivery via PC Internet and the mobile channel as a promotional and transactional platform. Just look at the recent announcements of AT&T Wireless, for instance.
6) Entertainment industry will continue to embrace the mobile channel. The Simpsons mobile channel by Vodafone was probably the most significant launch of branded mobile entertainment in 2003. This trend will continue as entertainment companies will increasingly understand how to create a mobile extension of their service. However, revenues will still be modest and revenue share models with the operators will remain problematic.
7) Porn will save the life of many mobile startups. Many mobile application developers are still ’sleeping over in the office’ and getting access to early revenues in crucial. Adult services is an area where many bleeding edge technologies such as streaming video will thrive already in 2004. It is the only form of entertainment where not seeing things clearly might actually be a blessing…
Branded mobile services will continue to shape the industry. Vodafone Live! is making a claim to world dominance by effectively building the ‘McDonald’s of mobile services’, a franchiseable business concept with a proprietary content offering. This trend will help the market grow as it will teach consumers to want a standard, simple product. This is a mega-game where Vodafone is leaning forward with an over-promising marketing push, Nokia seems too shy to play and Microsoft is not yet ready to lift the clutch. Moreover, Qualcomm is trying to be the David in front of a Goliath in Europe - sure, it did work once… The global trade of mobile applications will thrive as both CDMA and GSM players are offering their expertise to the US marketplace.
9) Lifestyle marketing will help consumers ‘get it’. Already championed particularly in Korea, lifestyle approach to mobile services development is gaining ground. A good example is the Australian action sports oriented MVNO Boost Mobile who are building a cross-carrier content offering for the US market. Urban/hip-hop lifestyle has gained an incredible global following. The latest news tell that the Chinese government is endorsing the creation of hip-hop versions of Chairman Mao poems. As another highly mobile lifestyle, hip-hop will be fertile ground for those who want to enable and encourage true creativity of new mobile phenomena.
WHAT WILL NOT TAKE OFF IN 2004?
1) Bluetooth (I started calling it ‘personal area ISDN’), although I am a qualified ‘Bluetooth Psychic’ who can already make a PC dongle work with a Bluetooth phone with some twisting and praying each time.
2) Location-based services (still too early, perhaps in 2008)
3) 3G (we all know it, I said 2006… I will put my hopes on EDGE, though)
4) WiFi hotspots (they are up for an ugly surprise with CDMA2000 EVDO in the US…)
5) Mobile instant messaging (it sounds attractive but the devices enabling fast typing are not yet there in large quantities…)
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Disclaimer: Opinions presented herein are those of the undersigned and do not represent the position or message of any company I might be affiliated with.
