Mobile market 'at risk' as new applications fail to meet consumer needs, claims market assessment

location based services

25 May 2007
Consumers 'suspicious of overly complex and expensive mobile content applications'
Alpheus Solutions has released a mobile content market assessment paper which, it says, highlights the risks the mobile industry faces from failing to align new services and applications with consumer demands.
Focusing on the promise of new services - such as mobile advertising, social networking, location-based services (LBS) and mobile TV - the Alpheus report is said to look at ways of increasing the likelihood of mass adoption of new content services. And, says Alpheus, the major finding of the research was that, undermining all of these new markets, is a major risk of services not aligning with consumer demand. Ultimately, the research showed that consumers are increasingly suspicious of complex applications that don't meet their needs and potentially add to their mobile phone costs.
"Our assessment clearly shows the market is running the risk of losing billions from poorly planned services," said Nick Sex, chief operating officer of Alpheus. "People are suspicious of paying too much for disappointing services. Yet operators are now in a position to change all that - many services are now closer to being launched, and the key is that mobile operators need to get that launch right, the first time."
Key findings on the specific markets included the following:
* Social networking: There are two issues holding the market back - cost of data charges (E.g., consumers are not convinced they should pay to upload a video to YouTube via mobile when it is effectively free on a PC) and interoperability - people want to interact with their network of contacts irrespective of what device or network they use. On the plus side, with more powerful cameras, phones are now perfect for 'citizen journalism' - giving the immediacy that a PC doesn't have.
* Fixed/mobile convergence: Market data suggests that it is not
taking off as fast as people claim - users want proven additional features, simplicity and cost savings rather than simply agreeing with the benefits of convergence outright.
* Mobile advertising: The main success factor is that a mobile ad
will 'jump out at you' - on TV advertisers generally have 30 seconds to get a message across, less on the web and just a few seconds on a mobile. But it is the ideas that are more exciting than technology. Creativity is the differentiator and excellence in technical implementation nothing more than a given. Timing is also an issue - at the moment there is no mechanism for controlling the timing of when an ad arrives - leading it open to risk of being distracting and hence harmful to the brand. Mobile coupons are an area that is growing in interest, as they can drive people to visit shops rather than buy over the Internet. Finally, data charges are an issue - people don't want to pay to receive ads.
* Location based services (LBS) and advertising: The mobile platform allows functions that can't traditionally be done on the Web or TV, like using LBS. By combining contextual search, LBS and advertising operators can not only send ads to subscribers in response to requests, but also by analysing texts. So, if you'd just texted a friend while in the West End suggesting meeting up for a meal, it could come back with an ad for a restaurant located within 10 metres of your location, or a list of all restaurants in that area. With privacy implications, the market needs to agree where tailoring and personalisation stop and Big Brother begins.
* Mobile TV: Alpheus' assessment suggests the market may be held back by two factors, (i) screen size/resolution and (ii) how mobile TV fits into the existing TV distribution landscape, for example, users won't pay twice for TV they already get at home. The key to cracking this issue may be (a) bite size TV (E.g. news) that people can access while travelling (supported by research by Orange reporting that the average use of Mobile TV is two and half minutes per day and (b) add-on TV/DIY TV allowing people to upload clips to the likes of YouTube, or download extra features or special features for their favourite TV shows. Another potential revenue stream exists in moving content off mobile phones onto TVs or PCs where it is easier to view.