Mobile Advertising Forecasts All Over The Map From $11-$250 Billion
Advertising is the next big opportunity in mobile—by some estimates released this week, it will be a burgeoning $250 billion industry within two years, but other more conservative estimates predict it to fall between $11 billion and $20 billion in the next three years. So, which is it?
This week’s outrageous projection—$250 billion by 2010—came from the GSM Association, which believes that an initiative that Vodafone, O2, T-Mobile, and 3 are working on, could make it as easy for advertisers to run campaigns on mobiles as it is on TV or in print. The results were reported in Mobile Entertainment.
Criticisms came fast. Chetan Sharma, who co-authored the book Mobile Advertising: Supercharge your brand in the exploding wireless market†said in his blog: I have seen ridiculous projections before but this has to top everything we have seen before and then some more.†In an October cover story in the Economist that hailed mobile phones as a marketers’ promised land, still said mobile advertising is only a tiny business. In 2006, $871 million was spent on mobile ads worldwide, according to Informa Telecoms & Media, and the most bullish forecasted between $11.4 to $20 billion by 2011.
The GSMA said the industry will be large because of all the great things about mobile that we’ve all heard before—it’s a personal device that people carry with them always; and it can provide behavioral statistics on consumers; and therefore it can provide more targeted ads. The article points out that the carriers are doing this as a defensive move against Google and others. Their aim is to build a system that’s as quick and painless as online, while still reaching millions of consumers.
So, the question is, will the carriers be able to pull it off? In Sharma’s first chapter, he points out what the wireless industry is up against: The challenge is that the market is too nascent to make simple linear projections and assumptions. We must be mindful of the difference between emerging and steady state markets when building our business strategies.â€
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Mozilla in mobile browser talks with operators
Open-source software development initiative Mozilla said it is in informal talks with mobile operators about its free Mobile Firefox browser. At present, Mozilla plans to release mobile browsers for the Linux and Windows Mobile operating systems, with five full-time engineers at work on the project. In an interview with InfoWorld, Mozilla VP of engineering Mike Schroepfer said some operators are threatened by the introduction of a free mobile browser, citing concerns it may diminish their control over the user experience. “Mozilla’s mission is to break open a closed market,” Schroepfer said. “It won’t happen overnight.” Christian Sejersen, who heads up Mozilla’s mobile engineering group, added Mozilla is relying on operators to contribute to the development of mobile Firefox in much the same way the open-source community lends assistance to improve its desktop browser.
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Vodafone Launches Vodafone Branded 227 and 228
Vodafone, the world’s largest mobile operator, occasionally releases handsets under its own brand, which allows Vodafone to build its recognition among consumers. The newly-launched Vodafone 227 and 228 are both entry level handsets designed to appeal to price-conscious consumers looking for a stylish handset.
The 227 is a clamshell, while the 228 comes in the slider form factor. Both cell phones offer basic voice and text services, along with a color display and included wired handsfree headset. Both phones will be made available throughout Vodafone’s Europe and emerging markets.
Vodafone launched seven handsets in 2007 under its own brand, and these handsets make up 1/6th of the total handsets it shipped in 2007. Vodafone uses a consistent design across its own handsets, including the keypad layout and user interface, to build brand recognition among consumers.
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Huawei’s 3Com deal flops (China)
This isn’t exactly a shocker: Huawei has suffered a major setback* in its bid to buy a stake in 3Com. The Chinese telecom-equipment company has been trying for months to be the junior partner in a deal led by Bain Capital to take over 3Com in a proposed $2.2 billion deal.
It didn’t take long for opposition to the deal to build in the U.S., though, as lawmakers in Washington griped about the security implications of a Chinese company allegedly tied to the People’s Liberation Army (a charge that Huawei has consistently denied) gaining access to a second-tier American company,and now the companies are withdrawing their application to the Committee on Foreign Investment in the U.S.
No doubt many Chinese will see this setback for Huawei as another sign of a protectionist, anti-China agenda in the U.S. But hold the indignation for a moment. Huawei has largely itself to blame for this flop. One reason people worry about Huawei is because its founder and CEO, Ren Zhengfei, is a former PLA officer. But rather than allay concerns that he’s somehow still connected to the military, Ren has stayed in the background. While Huawei often makes other executives available for interviews, that openness ends with the CEO.When the boss won’t talk, that doesn’t exactly inspire confidence among people already inclined to distrust the company.
Compare Huawei’s case with that of another Chinese tech company that made a big move in the U.S.: Lenovo. China’s top computer maker bought the PC division of IBM in 2005, and while some people grumbled about security implications, the deal went through. In part, that’s was because Lenovo is a public company and isn’t as mysterious as the privately-held Huawei. And Lenovo’s top executives especially chairman Yang Yuanqing are not at all shy about speaking to reporters and telling their story. That reassured would-be skeptics that the company had nothing to hide.
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New Zealand rejects telco separation plan
The New Zealand government turned down an amended separation plan proposed by Telecom New Zealand, saying the company would have to do more to implement rulings to boost competition.
The government ordered the dominant telco in 2006 to open its phone network to competitors and split into wholesale, retail and network divisions to speed up the introduction of cheap, fast internet services and greater competition in telecommunications.
In October, Telecom announced a NZ$1.4 billion ($1.1 billion) plan to split into three, but Communications Minister David Cunliffe, quoted by the Reuters report, said Telecom’s undertakings would not be enough.
“In general terms, Telecom’s revised undertakings come close to meeting my Amending Determination. However, there are a few areas where clarification of the undertakings is still required,” Cunliffe said in a statement.
He said Telecom needed to provide a clear upper limit on group-based incentives to ensure its wholesale business would treat all its customers equally. It also needed to clarify some technical issues.
Telecom must open up its copper wire domestic phone networks, known as local loop unbundling, to competitors to provide competing internet and phone services.
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1.53b handsets shipped in 2007
Worldwide handset sales increased 16% to 1.153 billion units in 2007, driven by rising demand in emerging markets, says Gartner.
Nokia, the biggest phone vendor, increased its market share to 37.8%, up from three percentage points from a year earlier. In a disastrous last quarter, Motorola fell nearly ten points to 11.9% over the previous year.
Strong sales in China and India lifted Chinese handset supplier ZTE into top ten for the first time with a 1.2% market share. But the popularity of high-end BlackBerry and iPhone devices also put smartphone vendors RIM and Apple in the top ten. Taiwan’s BenQ, France’s Sagem and China-based Bird were the three displaced from the top group.
Gartner predicted growth to decline to 10% in 2008, with western Europe and North America contributing to just 30% of sales.
Gartner mobile devices research director Carolina Milanes said the strength of emerging market demand meant that handset sales were likely to be relatively immune to a recession†in the US and western Europe.
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Mobiles users tune-in to the radio
Music applications have become the fastest growing services on mobile phones, acording to new market research.
The use of MP3 players on mobile phones rose by 78 per cent last year, but that radio via mobile went up by 140 per cent.
Growth has occurred in all 29 countries surveyed, particularly in Latin America and emerging Asia regions, where 45 per cent of users list FM/AM radio as one of their top three choices for purchasing a mobile phone.
“Radio-enabled mobiles take away the need to have a separate music device like an MP3 player and should lead phone manufacturers to win the battle for control of the earphones,” said Matthew Froggatt, managing director of TNS’s Global Technology sector.
“The increased use of radio in the Asian markets is also extremely important. It is driving a whole new wave of customers to service providers and has huge implications for spreading media communications to a wider audience more quickly.”
Two thirds of people aged 16 to 21 now listen to some form of mobile music on the go, but it is also surprisingly popular with more senior generations. The study shows that 20 per cent of people aged 51 to 60 tune in to music on their handsets.
Globally, 43 per cent of all mobile users and 73 per cent of smartphone users now listen to some form of mobile music.
“The radio is a hugely underrated media tool which has suffered at the hands of TV music channels and the internet. This new outlet through mobile phones may help to sustain its life well into this millennium,” added Froggatt.
However, the report warns that the music industry needs to be cautious of seeing this as a money-spinner, as 22 per cent of global users now load music onto their phone from a PC, compared to just 16 per cent who download directly.
Many consumers already have music libraries in a digital format and are often put off downloading directly to their mobile because of high price perceptions.
Using the phone as a music player gives device manufacturers an opportunity to increase consumer involvement with their products, but for network operators and music rights owners incremental revenue growth through downloading may be limited.
“For the networks, enhanced real-time data services, like mobile internet or location-specific information, may be a better bet to increase consumer spend,” concluded Froggatt.
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Opera Mobile and Opera Mini to use Google as default search engine (USA)
Opera Mobile and Opera Mini to use Google as default search engine
Opera Software has announced that their Opera Mobile and Opera Mini products would now use Google as the default search engine.
This means that Google has managed to snatch away a deal from Yahoo which was previously the default search engine on these two mobile applications.
Incidentally, Google is already the default search engine in the desktop version of Opera since several years now.
Opera said that the change is applicable to all markets except for Russia and the former Soviet Republics.
Jon von Tetzchner, chief executive of Opera added on this deal: Google and Opera have established a valuable relationship over the years and we look forward to continued collaboration on mobile products. With 2008 poised to be the year the mobile Web goes mainstream, Google and Opera are extending this collaboration to give our users immediate access to the quality and convenience of Google’s search results.â€
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Mobile phones sales top 1 billion as Apple enters top 10
Worldwide sales of mobile phones surpassed 1.15 billion units in 2007, according to market research firm Gartner. The company also said that three new companies entered the top ten in sales for the first time including Apple with its iPhone.
Apple was joined in the top ten by ZTE and Research in Motion with its popular BlackBerry device.
Nokia is leading the way in mobile phone sales with a 37.8 percent market share, followed by Motorola (14.3 percent), Samsung (13.4 percent), Sony Ericsson (8.8 percent) and LG (6.8 percent). Total worldwide phone sales increased by 16 percent from 2006, according to Gartner.
While 2007 was a good year for mobile phone-makers, the same does not hold true for 2008′s outlook. After another strong year, we expect the growth in sales of mobile devices to end users will decelerate in 2008 and fall to about 10 per cent growth as mature markets become more saturated,†said Carolina Milanesi, research director for mobile devices at Gartner.
Apple introduced the iPhone last June and has sold over 4 million units since, including 2.3 million units in the last quarter alone.
At the Goldman Sachs investor conference earlier this week, Apple’s Chief Operating Officer, Tim Cook, said the company is confident it will make its goal of selling 10 million phones by the end of 2008. Cook also said that Apple is not married to the single carrier model of selling iPhones, although that is the strategy the company has adopted to this point.
Apple is holding a special event in Cupertino, Calif. next week where it will unveil a new software development kit (SDK) for the iPhone, which will allow third-party developers to write applications for the device. This will take away one major complaint from consumers of not having the option to install applications on the iPhone.
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Disney begins mobile service in Japan
Disney launched a mobile phone service in Japan on Saturday in cooperation with Softbank Corp, entering the tough Japanese cellular phone market following its withdrawal from the the United States.
Walt Disney Japan, the local unit of Walt Disney Co., released three types of mobiles, made by Sharp, all covered with silhouette patterns of Mickey Mouse.
They also have a special online feature that allows subscribers to jump to Disney websites, while Disney’s iconic characters can be used on standby screens and to decorate e-mails free of charge.
Walt Disney Japan has teamed up with Softbank, an Internet conglomerate and one of the nation’s three mobile giants, leasing part of the networks and outlets owned by the Japanese firm.
Disney has become Japan’s first so-called mobile virtual network operator (MVNO), or a company that buys capacity from another firm to provide cellphone services.
In the US Disney Mobile marketed itself as a family-friendly mobile phone service that would allow parents to talk easily to children. But the MVNO with Sprint shut down after only 18 months, with Disney finding it more profitable to sell its content through other service providers.
Japan, a nation of 127 million people, has more than 100 million mobile phones in operation — which translates into a major challenge for service providers to achieve growth.
A Walt Disney Japan official said the firm was confident of success here as Disney already had a strong following in Japan, where Tokyo Disneyland receives tens of millions of visitors every year.
Disney had already been a major content provider for mobile phones in Japan, the official said, adding that its tie-up with Softbank would also help bolster profitability of the service, named “Disney Mobile”.
