When Is a Mobile Phone Not a Phone?
When Is a Mobile Phone Not a Phone?
By: Tom Dibble
Jan. 1, 2000 12:00 AM
When it's a camera. SMS or text messaging has been one of the all-time great legacies in terms of consumer adoption of a new technology. With the advent of the first MMS (multimedia messaging) services launched recently in Europe, many are saying that MMS will follow the same trend. But will it?
The mobile game has always been voice. Maximizing voice revenue has been a number one priority for mobile operators the world over. Then SMS was accidentally stumbled upon, and became a major way of communicating person to person. SMS now contributes, on average, just under 13% to the revenue of operators in Europe. With ever more advanced technologies becoming a reality, operators hope to entice ever-increasing amounts of monthly ARPU from their subscriber base.
MMS has been set up for success in the new data market. The industry is hoping it won't be another WAP story. Operators are searching for higher value services to make this model work so that consumers will pay for the higher cost of handsets and tariffs associated with them.
It's this theory that pushed the mobile industry to invest billions in 3G. This was over two years ago and we're still not there. GPRS was implemented and it was seen as the interim stage to migrate people onto data-driven services. That doesn't seem to be happening. For example, one large mobile retailer in the UK said earlier this year that it was selling around 35,000 GPRS-enabled handsets a month, but fewer than 200 customers were actually signing up for services.
According to research company Canalys, depending on your tariff, GPRS charges range from about $55 to more than $600 to download 20Mb of data. The hottest thing in Japan at the moment is a phone that's also a camcorder. When Vodafone introduced handsets that could record a five-second video clip and send it to other mobile users, it sold 115,000 units in less than a month. That's one step ahead of where Europe is. The recent introduction of so-called camera phones has been met with uncertainty in the industry. The operator's plan is to maximize on the popularity of text messaging to propel the MMS market. We're seeing the usual array of glossy TV advertising to support picture-messaging services.
From a tariff standpoint, expect each MMS message to cost about 52¢, compared with about 18¢ for a standard text message. To gain some momentum, handsets will have to be heavily subsidized. For example, T-Mobile's GPRS camera phone the Sony Ericsson T68i retails at a heavily subsidized $300. Normal voice tariffs apply and users can choose to add a $30 per month supplement that gives a credit of around 350 pictures to be sent in that month.
Breaking into this new era of mobile applications will not be an overnight success. With the recent miserable failure of WAP still fresh in the minds of the industry and the consumers who felt let down by what they believed it could do for them, incentives will be required to make a dent in acquisition numbers for MMS services.
Heavily subsidized handsets will need to remain for the immediate launch. Intelligent bundles of voice and data services and freebies will have to be marketed. But the biggest problem will be getting people to buy the new handsets required, considering the current global economic climate.
The latest MMS handset isn't riding high and won't be in the near future on people's agendas. Are there enough early adopters to create the initial market? These handsets will be key as they are the enablers for person-to-person MMS. If your friends don't have one, who are you going to send messages to? Operator handset migration could be the key to unlocking this new era of services. Something that they really never bothered with before. With Christmas just around the corner, it will be interesting to see what festive incentives operators come up with and indeed come January, what volumes of MMS handsets were actually sold and MMS usage of them.
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