Research Notes

Low end colour mobile phones could break the ice for the 2.5G and 3G rollout

Both the mobile operators and the terminal manufactures are still not quite sure exactly what will trigger the 2.5G and 3G markets, thereby ensuring a smooth and speedy transition. Some mobile operators still do not even have their 2.5G rollout strategy in place, which accounts for the lack of sensible marketing around the launch of new mobile phones, MMS and GPRS – basically the majority of the European mobile consumers still have no idea as to why they should want to upgrade to a new mobile phone sporting these and other new features.

At the same time, the market for PDA’s is slowing down. There is undoubtedly a market for smartphones, with built in PDA facilities, but not a mass market and with the price of the recently announced new smartphones – definitely not the type of terminal that young consumers will rush out and buy.

However, Strand Consult’s new report “How to make money on mobile services” a picture of the current & future Market for Mobile Services in Europe points towards that the market for mobile services will grow rapidly in the coming years, together with P2P (person to person) messaging – making up 32% of the mobile operators total ARPU (average revenue pr. user) by 2005. But as the report points out, there are still many hurdles to navigate before the market really can take off – one of them being that the mobile operators still are uncertain exactly how, when and with what, they should try and kick start the market with, enticing mobile consumers to buy the new colour GPRS, MMS and Java enabled terminals that basically are fundamental to getting anything to even remotely take off.

But there could be a quite simple solution to their dilemma – low end, low cost colour mobile terminals.

Looking at what will be the largest killer applications in 2005, according to the report, the following areas will have a major slice of the cake:

·Adult services
·Contests, competitions, lottery

Looking through this list, which is explained in detail in the report, it is not difficult to see that all of the above applications can run on a low end phone without fancy and expensive PDA capabilities. The only thing that would be of interest on a low-end phone is making sure that the phones memory capacity is tailored to the expected use of the phones or alternatively upgradeable with extra memory.

Right now there few 2.5G low-end mobile phones with colour screens available on the market in Europe. There are rumours in the business that more low-end colour terminals may be on the way in the first half of 2003. If that is the case, it could be a gift from above for the mobile operators.

The operators still have a lot of work cut out for them, but if young consumers are offered low cost colour mobile phones featuring GPRS, MMS and Java, they could really go for them – even if there still is a shortage of content and services in the beginning – and then at least one hurdle that the operators still are puzzling about, will get solved for them.
More information on the report

Contact us to get a copy of the report

Request the report