M-Learning Forum

www.strategyanalytics.com

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M-Learning Forum

Market Trends in Mobile and Wireless

Phil KendallDirector Global Wireless Practice, Strategy [email protected]


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Agenda

• Wireless Data Now– Key Trends and Emerging Dynamics– The Wireless Data Story to Date

• The Future for Wireless Data– Identifying Winning Segments – Identifying Winning Applications– Identifying Winning Devices


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Wireless Industry Macro Trends

• Global Wireless Subscribers approach 1.8 billion by 2006 - penetration in developed markets will exceed 80%;

• High Bandwidth services will sentence voice to the ICE Age;

• Entertainment, Content and Commerce will be dominant in the second half of this decade;

• Success for Wireless Operators will be closely linked to their ability to:– gain a first mover advantage in advanced network technologies

(location, voice navigation, unified messaging, etc.);– develop extensive customer profiles and exploit these to connect with

customers on a personal level; – embrace and engage content and media empires.

• New marriages between content, computer, communication and automotive industries will emerge & mVNOs proliferate


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Key Challenges for Wireless Industry

• CUSTOMER ACQUISITION

• CUSTOMER RETENTION

• VALUE CREATION– improving voice usage

still critical;– tapping into data

revenues ASAP a must. 0

50

100

150

200

250

US$

bill

ion

1998

2000

2002

2004

2006

2008

2010

W. European Voice & Data Revenues

DataVoice


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W.Europe: Value-added Service Usage

SMS penetration still increasing - less than 20% of users have NEVER received an SMS. Usage of Information services still failing to generate the

momentum of person to person text messaging.

80%

63%56%

73%

58%

44%

14%15%9%

13%10% 8%

24%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Receive SMS Send SMS E-mail Info Services Ringtones/icons

2001 2000 1999


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Youth Segment Opportunity for SMS/Data

89%

93%

41%

91%92%

30%

83%90%

26%

67%75%

21%

62%71%

18%29%

39%

10%14%14%

0%0%

20%

40%

60%

80%

100%

16-20 21-24 25-34 35-44 45-54 55-64 65+

Send SMS Receive SMS Icons/ Ringtones


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WAP Still Lacks Strong Content

0% 10% 20% 30% 40% 50% 60% 70%

dating services

chat rooms

financial services

other entertainment

event/ activity info

games

directories

information services

e-mail

W. European WAP Use

frequent use occassional use


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W. European WAP Service Usage

Mopilot survey - 3Q 2000

T-MOTION - best used services:• Information (News, Business news, Weather) - 25%• Games - 20%• Community (Dating zone, Chat, Pride Guide) - 16%• Search (Phone directory, Yellow Pages, Doctor seach, Jobs) - 15%

BUT usage is very low - less than 10 minutes/user/month

0% 10% 20% 30% 40% 50% 60%

% WAP Users utilising service

Commerce

Games

Banking

Sports

Location

E-mail

News

BusinessPersonal


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i-mode Usage Patterns

Most popular unofficial i-mode sites are in the “dekai” category - meetings and encounters. DoCoMo does not support mobile

community/chat services via the i-menu.

i-mode Usage (March 2001)

other sites34%

E-mail41%

i-menu sites25%


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Passing The Test: 2-Stage Content Filtering

Video

Winning content will appeal to ....

Audio

Print

Beliefs &Values

FunSecurity

What value doesmobility add?

Always On...Always There

Location - Aware


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Key Target Segments for Mobile Content

Trait:

Lifestyle Segments

Networked Youth

ConcernedParents

TeamLeader

ActiveSeniors

TravelingExecutive

Individual Contributor

Career-Focused

Security-Minded

Fun-Loving

Socially Aware

Family-Minded


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Key Target Segments for Mobile Content

Networked Youth Instant/ personal messaging Access to fashion, trend setter publications/ shows Interactive Games , Puzzles, Competitions Customised/ Composable ringtones & music downloads

Active Senior Photos & video clips Information on golf, tennis, other activities Health tracking/ monitoring Navigation/ location & transportation assistance Financial planning & investment management

PlatinumExecutive

Select access to documents on the server Business/ industry news (in a convenient format) Calendar and task synchronization for work AND family Location-based mobile yellow pages and navigation/

location solution Unified mailbox and voice command access to content


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Interest in Emerging Consumer Applications

Note: Willingness to pay among users expressing an interest.

Youth demonstrated strong interest and willingness to pay for multimedia applications.

0% 5% 10% 15% 20% 25%

% consumers interested

Local Ads

comics

stock trading

video clips

e-photos

download audio

trivia quizzes

interactive games

step-by-step directions

m-commerce

Interest in Emerging Applications


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Interest in Multimedia Content

(Willingness to Pay among users expressing an interest.)

The youth market remains a major demand segment for multimedia content.

5%

26%

4%

48%

0% 20% 40% 60%

downloadingaudio

sendingdigitalphotos

% Users Interested in Application

Under 25

Over 25


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Interest in Emerging Business Applications

Note: Willingness to pay among users expressing an interest.

0% 10% 20% 30% 40% 50%

% business users interested

Video-conferencing

CorporatePIM

56K data

Fax printer

128K data

UnifiedMessaging

Interest in Emerging Applications


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Core Business Application Segments

Those cellular users already using a laptop or PDA to access e-mail/corporate LAN when out of the office (mainly via fixed lines)

are much more interested in emerging wireless applications.

0% 20% 40% 60% 80% 100%

Video-conferencing

Corporate PIM

56K data

Fax printer

128K data

UnifiedMessaging

Remote Access Users

All Users


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Cellular Data Evolution

0

20

40

60

80

100

120

W. European Cellular Data Revenues

Messaging Information Services Location-Based Services Entertainment Other

Messaging will continue to drive European cellular data revenues for some years. Entertainment and Content will

dominate in the second half of the decade.


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W. European Data Penetration

Devices will remain a significant bottleneck for wireless data penetration. The right devices will be available (though late) - the challenge will be to get them into the hands of the right

users at the right price.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2000

2002

2004

2006

2008

2010

% o

f al

l ce

llula

r use

rs

MessagingInformationLocation-BasedEntertainment


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2.5G Meets Most Data Needs

Most Data Usage will be of applications which have more modest bandwidth requirements than those offered by 3G.

0%

20%

40%

60%

80%

100%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

W. European Cellular Data Evolution

2G2.5G3G


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Wireless Device Ownership by Technology

0

50

100

150

200

250

300

350

mill

ion u

nit

s

W. European Handset Ownership

3G2.5G2G


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Cellular Phone Pricing

• Smartphones Wholesale Prices fall to $80 by 2005, CAGR of -18%

• Multimedia terminals emerge as high price, big, and ugly but rapidly improve. Expected wholesale/fob of $600 dropping down to $250

• Basic browser phones become “entry-level” by 2003.

• Non-browser phones virtually disappear by 2003

• Smartphones take 22% share of units by 2005 representing annual unit volume of 195M

Wholesale Price Points

0

100

200

300

400

500

600

700

1999 2000 2001 2002 2003 2004 2005

US$

Basic Browser Smartphones

3G Avg ALL


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Wireless Devices Summary

Handset Sales Volume (1 billion units)Non-browser

phone1%

Browser phone69%

Smartphone23%

Multimedia Terminal

7%

PDA Sales Volume (85 million units)

3G PDA30%

2.5G PDA20%

Basic PDA50%


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Thank You….

For more information about Strategy Analytics’ research please contact:

Phil Kendall

[email protected]

tel: +44 1582 589813

Documents

M-Learning Forum