When Is a Mobile
Phone Not a Phone?- by Tom Dibble
When it's a camera. SMS or text messaging has been
one of the all-time great legacies in terms of consumer adoption
of a new technology. With the advent of the first MMS (multimedia
messaging) services launched recently in Europe, many are saying
that MMS will follow the same trend. But will it?
The mobile game has always been voice. Maximizing voice revenue
has been a number one priority for mobile operators the world
over. Then SMS was accidentally stumbled upon, and became a
major way of communicating person to person. SMS now contributes,
on average, just under 13% to the revenue of operators in Europe.
With ever more advanced technologies becoming a reality, operators
hope to entice ever-increasing amounts of monthly ARPU from
their subscriber base.
MMS has been set up for success in the new data market. The
industry is hoping it won't be another WAP story. Operators
are searching for higher value services to make this model work
so that consumers will pay for the higher cost of handsets and
tariffs associated with them.
It's this theory that pushed the mobile industry to invest
billions in 3G. This was over two years ago and we're still
not there. GPRS was implemented and it was seen as the interim
stage to migrate people onto data-driven services. That doesn't
seem to be happening. For example, one large mobile retailer
in the UK said earlier this year that it was selling around
35,000 GPRS-enabled handsets a month, but fewer than 200 customers
were actually signing up for services.
According to research company Canalys, depending on your tariff,
GPRS charges range from about $55 to more than $600 to download
20Mb of data. The hottest thing in Japan at the moment is a
phone that's also a camcorder. When Vodafone introduced handsets
that could record a five-second video clip and send it to other
mobile users, it sold 115,000 units in less than a month. That's
one step ahead of where Europe is. The recent introduction of
so-called camera phones has been met with uncertainty in the
industry. The operator's plan is to maximize on the popularity
of text messaging to propel the MMS market. We're seeing the
usual array of glossy TV advertising to support picture-messaging
services.
From a tariff standpoint, expect each MMS message to cost about
52¢, compared with about 18¢ for a standard text message. To
gain some momentum, handsets will have to be heavily subsidized.
For example, T-Mobile's GPRS camera phone the Sony Ericsson
T68i retails at a heavily subsidized $300. Normal voice tariffs
apply and users can choose to add a $30 per month supplement
that gives a credit of around 350 pictures to be sent in that
month.
Breaking into this new era of mobile applications will not
be an overnight success. With the recent miserable failure of
WAP still fresh in the minds of the industry and the consumers
who felt let down by what they believed it could do for them,
incentives will be required to make a dent in acquisition numbers
for MMS services.
Heavily subsidized handsets will need to remain for the immediate
launch. Intelligent bundles of voice and data services and freebies
will have to be marketed. But the biggest problem will be getting
people to buy the new handsets required, considering the current
global economic climate.
The latest MMS handset isn't riding high and won't be in
the near future on people's agendas. Are there enough early
adopters to create the initial market? These handsets will be
key as they are the enablers for person-to-person MMS. If your
friends don't have one, who are you going to send messages to?
Operator handset migration could be the key to unlocking this
new era of services. Something that they really never bothered
with before. With Christmas just around the corner, it will
be interesting to see what festive incentives operators come
up with and indeed come January, what volumes of MMS handsets
were actually sold and MMS usage of them.
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