Mobile & Wireless Roundup - Innovation & Industry News

There is a continual stream of companies getting engaged in the mobile industry around the world, monetising on premium content such as ringtones, wallpapers, videos, jokes, and horoscopes etc. The reason that they were so successful in economically developed countries, is due to the fact that people have disposable income, and mobile is seen as a luxury, and are used to paying for services that can be provided to the device.

A few comparisons:

PC based services (Free)

Messaging - Email, IM

Content - Desktop Wallpapers, News Videos, Comedy Clips, Streaming Audio

Mobile based services (Premium)

Messaging - SMS, MMS (£0.10 - £0.50 per message, or bundled for a charge)

Content - Wallpapers, Ringtones, News Videos (Costs vary per content provider)

It has been noted that this market has started to see a decline in premium content usage, and so the mobile industry is set explore new markets. Many have decided to turn to the Indian or Chinese companies, and pitch their products to them. However, these companies have been struggling to capture the full potential of the mobile content market in the same way that Europe, Japan, Korea and America have.

A new approach is needed

China has a well known issue with piracy, and many software products that are sold are illegal copies. This does not stop at the software industry, why would a consumer in China think it is acceptable to pay up to $5 for a content item such as a small picture for a wallpaper, when they can “rip” them from the web for free. Piracy is not the only issue that faces these markets, but also the income of the people living there.

Content is not the answer

Money can be made from the mobile industry in many ways (apart from premium content), through advertising and deals with corporations that offer services to users. The important thing to note, that emerging markets do not use mobile devices in the same way that economically developed countries do. Mobiles are the only form of communication, as minimal infrastructure is needed, compared to traditional fixed line services, and they consume a low amount of power. This can mean that they do not need a constant supply of electricity to use the services on the device, and they can be charged on a relatively low power source, such as solar, and wind up based chargers. The ability to be “wire-free” enables remote tribes and villages to communicate with each other effectively. This is the key market to utilise.

I feel that one of the next big innovations in the mobile industry, will help to provide an effective communication service for mobile users in developing nations. But they key thing to success, is not to charge the end user for the service.

China is currently seen as the country with most potential in the mobile industry. Not only because China Mobile alone has more subscribers that inhabitants of the US, but because the culture and attitude towards technology is vastly different to that of Western countries.

As companies in China are feeling the pressures of the Internet industry, and ensuring that their presence is felt globally, the relatively new sub segment of Mobile Internet and Communication in China is looking to become exploited in the rapidly developing climate.

The major question that these companies face is “Do we take the lead from western countries, and use what worked well?” As mobile technologies for use as a commercial gain by marketing and content companies in the UK has been around for nearly 10 years now, it is often perceived that therefor there is a lot of experience and knowledge in this subject area. So companies are beginning to release similar services in China in order to attempt to “crack” the Chinese market. Taking the same business models as applied in their home countries, and using them to setup in China.

My opinion on this method is varied depending on the attempted service. China has a relatively low income per capita, and do not have “disposable” incomes which they can use for luxuries, such as mobile ring tones. Their attitude to technology is different, just walking around the streets of Beijing, you can see hundreds of computer shops, and pirated software shops, allowing the general Chinese public use of usually expensive software products. Leading from this, and into the mobile market, people will not want to be paying for software based items on their phones if it is known that they can “rip” it off the Internet or create their own.

So a model which will charge consumers £1-3 per ringtone or wallpaper like in the UK, will not translate to China, and so the simple “money in the bag” attitude should only be approached with caution.

That said, information services should be the way forward in China, delivering free content (ad sponsored), reverse billed SMS for competitions and voting. As these have been huge revenue generators ($273million in Q1) in the western “TV Culture”.

Any ventures in the Chinese market should be approached with caution as not to cause offence due to difference in culture, but also this difference should be used as a stimuli for encouraging innovation, to work around known cultural differences.

Things to remember about Chinese Mobile:

1. No 3G Yet
2. Beijing 2008 Olympics
3. Walt Disney China launched free content
4. Mobile Ads predicted to reach $142 million in 2008
5. Mobile TV to be launched in conjunction with Beijing 2008