Global consumers today can choose from an extremely wide range of communication options. Among these options are mobile phones. We note that mobile phones appear to be a very commonly discussed and reviewed item on internet sites and they generate intense interest in and opinions from their users. This was certainly the case during the Apple iPhone roll out in June 2007.
In our view, mid range feature phones and high end smart phones will continue to be sold in growing numbers driven in part by carriers’ efforts to encourage the use of added cost service features. These features include music downloads, photo uploads, video downloads and uploads, mobile broadcast television, navigation, location based services, gaming, email, internet browsing, and more.
The underlying trend for many carriers has been to provide services only from within a “walled garden” to capture maximum revenue. Increasingly consumers will call for the walled garden to come down. That is, consumers will migrate to service providers that offer more open wireless access to services over the internet.
There are several important trends that will play out over the decade including the role of advertising on mobile platforms, the use of wireless handsets in point of sale financial transactions (the electronic wallet), user generated content (mobile video blogging), and more.
A key area to watch will be the roll out of Wi-Fi networking enabled mobile phones. These phones could offer consumers the ability to use VOIP calling features and web browsing on wireless handsets. Service providers will actively discourage Wi-Fi enabled phones since VOIP offers a means for consumers to direct some of their phone usage away from their wireless carrier, potentially reducing service provider revenues. While Wi-Fi networking could add useful capabilities to mobile handsets, the carriers want to prevent their subscribers from bypassing their network and disable VOIP capability on Wi-Fi equipped phones: another walled garden issue. The walled garden approach allows carriers to determine what software consumers use on their mobile device and how that software is used. Carriers currently inhibit the usability or utility of some optoelectronics enabled features of wireless devices to maximize carrier revenue. Carriers want their customers to purchase added services, or at least use airtime minutes to use those features.
There are many examples where mobile device software and applications are not selected by the consumer from the best of the breed but can only be obtained from the service provider’s limited offerings. This has many implications, for example, photos are difficult to upload to a user’s computer, videos and music are difficult to download, upload and synchronize across a user’s platforms, and more. To maximize revenue the service provider wants subscribers to use the carrier’s network and to purchase applications and services from the carrier. As the market matures, new approaches and solutions will evolve and new revenue opportunities will be created.
