Mobile Phones: 8 top hypes in 2007

Sunday, August 26, 20070 comments

It’s one thing to predict who’ll succeed and fail, but what are likely to be the most-hyped technologies and services in 2007? There are a number of eligible candidates whose apparent magical properties are likely to be excessively promoted next year. Strand Consulting tells us what are the mobile industry’s most-hyped in 2007:

Operators’ own shops:
A lot of operators believe it’s vital to have control over distribution by buying and managing their own shops. We do not believe operators can run such shops cost-effectively, nor do we believe that this is the answer to ‘disloyal’ independent retailers. Loyalty is something you win by virtue of your actions. In that sense, loyalty is like love – it cannot be bought.

There’s already a lot of talk around UMA, and how it will turn the mobile industry upside down. The fact is, UMA means higher SACs, higher support costs and lower ARPU – not to mention the lack of decent UMA terminals. The question to ask oneself is this: why should operators invest in infrastructure to be able to offer their customers a discount?

Mobile TV:
Mobile TV via DMB or DVB-H is something on everybody’s lips right now. But sadly, nobody’s developed the correct business model. Nor is it clear how to create the right sort of content for mobile phones or how to charge for it. Another thing most people forget is that DMB and DVB-H is flow television, not TV on demand, and we thus have little faith in it. We believe the future will be in small video clips that the customers can stream or download to their handsets.

Mobile IM:
A lot of operators see IM as the next big source of revenue, much like SMS. But this is very naive. IM is a peer-to-peer solution delivered on a flat-rate data package, and operators are kidding themselves if they think they can make money on anything other than the traffic that Yahoo and MSN generate on their network.

Advertising and free mobile services:
A lot of people believe adverts can finance everything from phones to services and traffic. But honestly, when most customers’ ARPU is between E20 and E40, you’d need to unleash a hell of a lot of ads just to finance one small part of the mobile market. Anyone believing that advertising revenue is the way forward for the industry should look at the value of the mobile market compared to the advertising market – all the world’s ads would have a hard time financing the

obile industry.
Internet companies in the mobile market:
A lot of internet firms dream of success in the mobile market. In their naivety, they believe that the way to succeed is through partnerships with mobile operators. These people should sit down and understand how the mobile market functions right now, and how it will do so in the future. It’s worth asking whether the same internet companies believe that the way to success on the internet was through ISPs. That’s not the type of partnership that created success for the likes of Google, MSN, Ebay, Amazon and Yahoo.

Mobile VoIP:
This is a hot topic that’s become widely talked about. However, most people forget that both the receiver and caller pay for data traffic. They also forget about the growing number of flat-rate mobile products on offer. Why does a customer need VoIP on their mobile if they can get flat-rate voice already?

Believe it or not, you still find a lot of people hyping the difference between 2G and 3G services. But we ask ourselves, what is the difference, and can 3G services finance a 3G business case over the next 3-5 years? We don’t believe so. 3G is still mainly about voice, which accounts for 90-95% of most people’s mobile bill. Isn’t it time to bury the 3G rhetoric?
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