We bring you our highlights of CTIA show last week. CTIA show is a major US wireless event that takes place twice a year. CTIA Fall show is generally smaller than its Spring show.
With 220 million mobile subscribers and $6.5B wireless data revenues in first half of 2006, US market is poised to take its mobile data business to the next level. A big underlying question of the conference was how to increase mobile content/data sales. If you recall from the last Arvani Report, we talked about DNC (Device Network Content) required for a mobile service. Now, we've got pretty good Devices, we've got high bandwidth Networks and we've got lots of Content. With a good DNC in place, how do we get mobile users to buy more?
You Are Acquired!
South Korean Wider Than, mostly known for its ring back tones, got acquired by Real Networks to the tune of $350M. This is Real Networks' biggest acquisition to date, thanks to its recent cash infusion from Microsoft lawsuit settlement.
News Corp announced it will pay $188M to VeriSign for a 51% controlling interest in German-based Jamba, a mobile ringtone company, famous for its Crazy Frog character. The plan is to combine Jamba with its Fox Mobile Entertainment assets to form a joint venture. The new company plans to bring "Simpsons" series to mobile devices.
The illusive Customer Experience
If we got a free song for every time a speaker mentioned customer/user experience, we would have an extensive music collection by the show's end. A good user experience makes obvious sense in any business.
As it relates to mobile environment, you don't want users to get dizzy traveling through a maze of menus and get a blister on their thumbs clicking away in search of the content they may want to buy or the application they have to run to get their jobs done. Carriers and content providers believe that in consumer space, good user experience, such as one click access to music store, will result in more content sales. In enterprise space, CIO's believe, good user experience is key to adoption.
Finding a Needle in a Haystack
A Cingular executive creatively dramatized what carriers have to deal with: A Home Depot worth of mobile content to sell and a hot dog stand worth of shelf space to sell it in. Discovery of content is a major challenge in mobile space. Going further back up the food chain, it starts with mobile content marketing that would result in customer awareness of mobile content. Carriers and Content Providers both agree there needs to be better mobile content marketing and they are pointing fingers at each other to address the problem. Mobile merchandising is also a major challenge, given the very limited shelf space. Some potential solutions are: mobile search (Verizon), creating personalized deck(Cingular), making recommendations, superdistribution, and pre-installing content on SIM cards(Orange).
Ads Coming to a Mobile Near You!
Mobile advertising was definitely top of mind for US carriers, including Cingular, Verizon, and Sprint Nextel. They are rightfully cautious and don't want to chase away the illusive user experience and turn the subscribers off. Proponents of mobile ads believe users would tolerate ads to get "free" content. Some believe there is a ceiling for how much users would be willing to pay for mobile content. While opponents believe mobile phone is a personal device in a paid environment. Ads will intrude in customers' private and personal space. The obvious compromise would be to give customers the choice. We believe, regardless of how targeted mobile ads might become based on user's profile, location, time and behavior, the default should be for customers to opt-in versus for customers having to opt-out.
Social Networking Gone Mobile!
Many believe popular social networking sites, such as MySpace and Facebook, will have a huge potential in mobile space. Theory goes: Spontaneous combustion will occur when you enable online socialites on mobile phones with location capability. Virgin Mobile called this phenomenon "blended networking" where virtual and social networking environments will meet. Supposedly, keeping up with your social circle on the go and knowing who you know is near you, is good for you.
Me, You, Let's Make Some Content!
Carriers believe there is a huge demand for user generated content (ala YouTube, photo messaging, and the like). Orange sees new revenue opportunities in enabling user generated content to be uploaded and shared with the user's network. Sprint Nextel also believes this is a high potential area, but sees the need for some standards around uploading of the user content.
CIO keynote panel discussed the issue of security. Carriers, such as Sprint Nextel, are offering managed services to support IT departments to take control of a company's mobile voice an data devices and data cards. CIO's don't want to lose control by employee's self deployment of mobile devices and technologies. Some CIO's discourage the practice by not providing support in such cases.
With respect to data security, one way is to lock it all down. Sensitive corporate data should be made available to mobile devices but not be pushed onto the mobile devices.
Biometrics didn't seem to be a big deal with the CIO's on the panel. Accenture, in its proper consulting form, said a cost/benefit analysis may reveal special cases where it would make sense to do biometrics.
Mobile TV and Video Update
Mobile Digital TV Alliance, a US-based consortium that supports DVB-H standards, released its first implementation guidelines. Modeo and HiWire, both developing DVB-H networks, are preparing to have some kind of launch by the year end. Verizon, who has selected Qualcomm's MediaFLO for its mobile TV broadcast, is pushing out its launch to Q1 or Q2 of 2007. CIO panel seemed less interested in video on mobile devices, citing issues with high usage of battery power and lack of established value for video content in enterprise.
Handcuffed by Mobile Digital Rights Management (DRM)
At a pre-CTIA keynote, Sprint Nextel said if the marketing issues are a speed bump for the content market, digital rights management problems are handcuffs. OMA DRM's licensing issues are still up in the air and there is no sign of resolution. Meanwhile, Windows Media DRM may emerge as a de facto standard. SDC, Java-based DRM company, is working on deals with US operators.
Superdistribution, a way in which wireless users can pass on their favorite content to their friends to check out, the Holy Grail of DRM, is getting more attention. Both carriers and content providers see superdistribution as a big enabler to content discovery and, hence, better user experience.
Location Based Services: Verizon COO called it a huge new frontier. We saw some LBS applications, but mostly around monitoring kids and designating child zones. You can now donate by text 2HELP to support American Red Cross Hurricane Katrina Relief efforts, thanks to CTIA's Wireless Foundation. Greenphone is an open phone - Check out Trolltech's mobile Linux device for application developers.