China Market Update
I just returned from China and Taiwan. While Taiwan has been hit hard by a 50% drop in exports, China continues to hum along (excluding the Southern part which has been hit hard by a large drop in exports). China is currently rolling out the largest mobile broadband network in the world, and in record time. China Mobile, China Telecom, and China Unicom are also racing to roll out new 3G networks with next generation video services. For China Unicom, this will involve IVVR as well as ringback tones. It is interesting to note that IVVR is one of the first applications that CU will roll out. With such a large and dispersed population, CU plans to use multimedia services via its IVVR offering to bring services “from the few to the many.”
The Mobile Applications Boom
I was just on a “Mobile Applications Boom” panel at the Red Herring Conference in San Diego, and what was interesting was that 4 of the 5 panelists were from outside the US. Since our business derives 90% of its revenue outside the U.S., I felt right at home. The key themes that emerged were that the U.S. continues to lag the world in mobile innovation, with the exception of the IPhone and its related app store. Additionally, service providers outside the US are moving much faster on mobile video services and related non-voice applications.
The consensus was that the market would evolve around a number of vertical app stores, built around the leading smartphone/mobile phone vendors. Several forecast that the IPhone would have 100,000 applications by year end, but that it would become increasingly difficult for developers to make money given the clutter. Additionally, the applications will likely evolve from the silly and frivolous to more formal applications, similar to what has happened in the social networking market.
RIM in particular will focus on its customer base, and while it will have far less applications than the iPhone, it will be very skilled at monetizing them from its existing fanatical installed base of Blackberry customers. Service providers, such as Vodafone, are also launching their own app stores, but the feeling was that they will be less successful in competing with the app stores from the phone vendors.
Multimedia Market Trends
The world of mobile multimedia has been around largely since the launch of the first 3G networks ten years ago in Japan. During this time more, than 100 operators and service providers have sold video services to their subscribers and a number of trends are starting to emerge, especially during the past year.
While it is easy to throw out words such as personalization, social networks, and communities of interest – there is little consensus on what this means for multimedia services to mobile phones, PCs, and televisions (the three-screens). However, we are seeing massive take up currently in all kinds of new video services to both 2.5 and 3G handsets.
A number of factors contribute to this market increase including: easy-to-use, simple and great video quality smart phones (think iPhone e.g.), better pricing by service providers, and even a good degree of marketing to promote these services.
Multimedia market trends is a very broad topic and we will be writing much more about this in the coming weeks and months. For now, suffice it to say that we believe the market for multimedia across broadband and mobile is taking off now!
So what will the next 18 months bring for video services? Which kind of services will people be using? What macro economic and social trends are coming that will drive new services?