Research Notes

The mobile services platform suppliers do not understand the market

– and that can kill them…
Many mobile platform environment suppliers have primarily chosen to focus on the technical development of their platform and forgotten all about how mobile services will reach the end-users. The focus has been on developing a platform for mobile op-erators and once delivered they have had a naive dream that the mobile traffic and mobile services consumption would take care of themselves.

If you examine the market for service platform environments, most of the suppliers have primarily focused on developing platforms that are compatible with the various types of smart phones (Windows Mobile, Symbian, etc), even though most of the mobile users to-day do not use handsets with advanced operating systems (smart phones) – and indeed for many years to come the market share of that type of advanced handset will still be very small. All “ordinary” mobile users do however use handsets that support Java and it is therefore essential that the platform environment supports Java, as all mobile customers can then technically use the platform. By focusing on Java, the platform suppliers can achieve a significantly improved level of distribution, which will give them an improved business case for the operators – their most important group of customers.

In Strand Consults report – ”How to get success in the 3. Generation VAS market” – we have conducted an in-depth analysis of the importance of the number of potential customers that are able to use a platform to browse for mobile services and to purchase and use them. For a platform to be successful it is necessary to have a high share of potential customers, as the supply and demand is very dependent on the financial possibilities a platform creates. In this connection the report contains a well-documented analysis of 12 different service platform environments and the number of possible customers that can use these platforms, which is something that varies a great deal from platform to platform. The service platform environments that have been analysed and described in the report are; BREW from Qual-comm, Mobile2Market from Microsoft, Handango, Brand-n-Go from Action Engine, Ser-vice Layer from Ericsson, Preminet from Nokia, Opera, FlashCast from Macromedia, Sur-fkitchen, OpenWave, Vodafone live! and i-mode from NTT DoCoMo.

The platform suppliers are not the only ones that are creating obstacles that are preventing the best possible distribution to the end users – also the mobile operators’ business models and distribution strategies can be obstacles. Many operators have chosen a very restrictive approach to the business area of mobile services, as they feel they must be able to differen-tiate themselves in the Value Added Services area. This restrictive approach has an enor-mous influence on the platform suppliers business, as it influences the number of potential customers, which again influences the level of success the platform suppliers can expect to achieve when customers use their platforms.

Many operators have chosen to develop or purchase their own platforms for distribution of services and many have decided that the platform can only be used by their own end users, thereby reducing the number of potential customers drastically. For the platform suppliers it is essential that the services can be purchased and used by as many users as possible, as many platform suppliers have chosen a business model that is wholly or partly based on revenue sharing and this makes the platform suppliers business vulnerable regarding the traffic on the platform, as the suppliers are dependent on a share of the revenue of the gen-erated traffic.

In Strand Consult´s report – ”How to get success in the 3. Generation VAS market” –
we have analysed how being unable to offer their products to all mobile users actually af-fect the various platform suppliers, as a wide distribution is essential to achieve a good business case on the future mobile market. The report also discusses what actions the plat-form suppliers can take to improve their distribution possibilities. 

the 3. Generation Value Added Service Market

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