Understanding the Mobile Application Service Market

– a picture of the current & future mobile service market

Today, when mobile operators and content providers deal with Premium Mobile Services, their primary focus is on Premium SMS – and now to a little extent – Premium MMS services. This focus is mostly due to the fact that SMS has up o now been the only successful premium mobile service and most people expect premium MMS will be the natural successor to SMS, by offering more advanced possibilities.

However, one of the main conclusions of this report “Understanding the Mobile Application Service Market – a picture of the current & future Market” is that both in the short term and longer term, just focusing on SMS and MMS would be a grave mistake for both the mobile operators and content providers. This is because that this report shows that the revenue potential for premium WAP services and Mobile Applications will rise dramatically in the near future and continue to rise in the coming years up to 2005. The report documents that premium WAP services and Mobile Applications will generate respectively 24% and 44% of the total 2005 European market for sales of premium services! In 2005, premium SMS will only contribute with 7% of the total premium mobile services revenue.

WAP Browser Based Services:
Based on the data and information in the report, the analysis of WAP browser based services leaves little doubt as to the fact that WAP will become a huge revenue generating success in the very near future. Already in 1999 when WAP was first launched, the mobile operators had set their sights on WAP as the primary motor for generating non-voice revenue. However the combination of the technology at that time and the lack of revenue sharing models meant that WAP never had a chance back then. This report goes through the developments that have happened since then that will push WAP up to the top of the mobile services technologies and in just a few years contribute a quarter of the total premium services revenue across Europe.

The report goes through some case studies showing how some European mobile operators are already working with Premium WAP, and also includes a case study of (UK) and Daum (South Korea)

Mobile Applications:
This report goes through in detail the revenue opportunities there lie in mobile applications for both the mobile operators and the content providers. The term “mobile applications” covers types of mobile services that can be downloaded and saved on the end users mobile phone. These services can be developed in for example Java, C++, Basic or .Net. Once downloaded, the end user can use the program on his mobile phone without having to connect to the network – unless the program is for example an email program or multiplayer game. While MMS has been hyped up tremendously in Europe, the possibilities and opportunities that mobile applications will offer have completely been overlooked – even though mobile applications are enjoying immense growth in for example South Korea which is now widely recognised as the most advanced mobile market in the world. The aim of this report is to turn the mobile operators and content providers focus towards mobile applications, which according to our analysis and calculations will generate over 9.9 billion Euro in 2005 across Western Europe.

All our estimates of the future revenue possibilities for the different services are based on actual traffic figures from 2002 from both operators and content providers across Europe. With this data, we have been able to make excellent estimates for services in 16 individual European countries up to 2005. The estimates also take into consideration a number of other factors in the indivual countries, factors like the terminal penetration of different technologies (GSM, GPRS and UMTS), expected new and replacement sales of terminals, the existing non-voice ARPU, each countries mobile maturity with regard to non-voice services and the business and revenue sharing models. Based on this data and other factors, Strand Consult has been able to estimate the market value of both Premium WAP services and Mobile Application based services in Western Europe up to the year 2005. On top of this the WAP and Mobile Services figures have been split up into both the different technologies (GSM, GPRS and UMTS), 12 different types of services including services like News, Games, Dating/Chat, Adult etc. and split into 16 different countries.

One very important feature of this report is that all the future revenue estimates have been split up into the operators perspective and the content providers perspective, so content providers can see how much prospective revenue they can expect after the mobile operator has taken his share. This is invaluable information when creating your mobile strategy – as it is not always the content that generates the most total revenue that will give the content provider the highest revenue after the mobile operator has taken his cut.

In other words, this report con provide food for thought for both those mobile operators and content providers that want to take a much closer look at both the opportunities and threats that can derive from WAP services – that most seem to think is history – and Mobile Applications – that few understand the importance of!

Whether readers of this report will choose to include one or both types of services in their mobile strategy is up to themselves – but having read “Understanding the Mobile Application Service Market – a picture of the current & future Market” each reader will be able to make his own decision based on the facts, analysis and information in this report.

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