Who will create most traffic on mobile networks – mobile phones or PCs with mobile broadband modems?
There is a great deal of focus on mobile broadband and this market is developing into one of the fastest selling products in mobile history. Likewise there is also a great deal of focus on the smartphone market and especially the iPhone and how many experts view its role regarding the development of mobile broadband.
Strand Consult’s focus is on mobile development and our analysts are closely monitoring the mobile industry. Through our analyses we have reached the conclusion that the picture often painted by the media about the mobile broadband market is very misleading and that there is no connection between which devices create traffic in the mobile operators’ networks and which devices are receiving press coverage.
If you look at what is happening on the mobile broadband market, it is in a great many countries developing to become a serious alternative to the traditional broadband products that are dominated by the DSL technology. In countries like Austria and Slovakia, over 30% of today’s broadband connections are mobile.
In Norway and Finland, DSL penetration is dropping and mobile broadband has proved that it is a real alternative to DSL for many customers. Customers are purchasing a combination of wireless routers with built-in 3G, PCs with built-in 3G modems and dongles that can be used with older PCs. Mobile broadband is here – and it is a success.
It is no secret that an increasing number of people are purchasing smart phones, but why are they purchasing these devices? Is it because they want an advanced mobile phone to access the Internet, or is it because the telephone manufacturers are trying to move focus over to these devices, to thereby raise the average price (AST) they are receiving on each telephone? We believe it is the latter.
It is a fact that the traditional Internet functions best on a PC. There is a great deal of online content and most content is designed for devices that are marketed and sold as computers. Only a small a part of the content market has been designed for mobile devices with small screens. The telephone manufacturers have some very serious challenges regarding content.
So the big question is where the mobile operators’ focus will be in the future? Will it be on sales of new smartphones to old customers, or on sales of portable PCs with built-in mobile broadband to new customer segments? We believe that many operators are currently moving subsidies away from phones and over to PCs.
In our report http://www.strandreports.com/sw3293.asp we have taken a closer look at these issues and have reached the conclusion that the sales of portable PCs with built-in mobile broadband will cannibalise the sales of smartphones. On the other hand the price developments on the mobile broadband market are working against subsidising portable PCs.
We know for a fact that on many markets, mobile broadband traffic is being sold at up to 50% below the price that it actually costs to produce that traffic. On that kind of market there is simply no room for the subsidies that are currently being offered on many markets.
If you would like more information about this market and how it is developing you should read our report: http://www.strandreports.com/sw3293.asp. We have spent two man years researching and writing this unique report about the mobile broadband market and how it is developing.