27th May - IBM released a new
study which reveals 80 percent of consumers would prefer a service provider that
gave them more choice in the applications and services available on their mobile
The study, titled, "Go mobile, grow" produced by IBM's
Institute for Business Value points to how consumer demand for customization and
personalization will drive innovation and open standards in the mobile marketplace.
The mobile web provides people with access to the Internet anytime and
anywhere. The market for mobile Internet services is estimated to reach US$80
billion by 2011, with increasing usage expected to fuel growth in both the provision
of services and mobile Internet advertising.(1) At the same time, the number of
mobile Internet users worldwide is projected to approach 1 billion, a 191 percent
increase from 2006 and a compound annual growth rate of 24 percent.(2) The ubiquitous
availability of IP wireless broadband and more affordable advanced smart phones
will change the way companies around the world operate and relate to their customers,
employees and partners.
IBM surveyed nearly 700 consumers around the world
on their preferences regarding the mobile internet. 69 percent of consumers reported
they want devices that are open to personalization and configuration of applications.
The IBM survey found the mobile web will increasingly be used for utility
and transactional services. For example, nearly 60 percent of consumers are interested
in banking via mobile devices. Other utility services include e-mail, instant
messaging, stock trading, news and information and general browsing. Also, entertainment
applications are growing in popularity with the IBM study finding 53 percent of
consumers interested in mobile TV and 45 percent interest in buying music via
"Clearly the same market forces which empowered consumers
to choose personal computers that were open and enabled them to customize their
applications are at play in the mobile web marketplace," said Dr. Sungyoul
Lee, Global Consulting Leader, Electronics Industry, IBM. "Our survey found
60 percent of consumers do not have a specific brand preference when using mobile
Internet services. With consumers clamoring for choice, the marketplace will need
to innovate around open platforms and models to build loyalty."
around the world will adopt the mobile web differently. In mature markets, IBM
consultants predict the Mobile Web will extend and complement the personal computer.
While in emerging markets like India and China, consumers are skipping their first
PC purchase and going straight to high-end mobile platforms that deliver the same
service. IBM consultants also predict that in semi-literate populations, people
will use low-cost mobile phones, whose user interface will be voice-based, which
will greatly expand their connectivity to people and data.
and Recommendations for Mobile Device Makers
The IBM study, points to a
number challenges which Mobile Device Makers (MDMs) will face in the "Era
of the Mobile Web." In particular, competition with established Internet
brands looking to the mobile web as a source of potential revenue poses a huge
challenge. Also, existing business relationships and channel conflicts will be
a major obstacle as MDMs could be perceived as threats to offerings by their network
partners and impact the core device business of MDMs.
from portal players and mobile network operators will force MDMs to compete where
they excel most by delivering innovation that wows consumers," said IBM's
Dr. Lee. "Mobile device makers, confronted by numerous challenges to growth
and profitability, need to develop new avenues to expand their core offerings.
At the moment, the mobile internet market is still somewhat fragmented. But it
is unlikely to stay that way for long. The time to act is now."
on the consumer survey results and further analysis by IBM industry consultants,
the IBM study identifies a number of factors which will help MDMs secure market
share in the mobile internet space. Namely, a focus on driving their design and
business models based directly on consumer insights will be vital. Also, the development
of a participation in a standards-based, open ecosystem for devices and services
will be a boon for innovation.
To take advantage of the opportunities offered
by the mobile Internet, the study says many MDMs may need to transform from device-driven
to service-driven. This may require changes in marketing and brand perception,
partnership strategies, content delivery and management, as well as revenue models.
This transformation in business model will also require a scalable and cost-efficient
infrastructure that enables them to rapidly ramp up services. This may include
looking at the benefits of partnering with a third party (e.g. outsourcing partner,
system integrator, etc.) in order to bring in the necessary expertise, while still
keeping the costs low.
Handset sales have reached saturation point in emerging
markets therefore compelling MDMs to move to higher end devices that enable more
services. This could bring a double boost to earnings and revenue as it raises
the average device price point and provides MDMs a cross sell opportunity to high
As part of its ongoing consumer research efforts, IBM
has the full report "Go mobile, grow" available at this IBM website.
In addition to working with clients on mobile web initiatives, IBM is making
major investments in software, hardware, services and partnerships related to
the mobile web. IBM Research has a number of projects in its labs focused on bringing
simple, easy-to-use services to the millions of people in the world who have bypassed
using the personal computer as their primary method of accessing technology, and
are instead using their mobile phone to access the web, conduct financial transactions,
entertain themselves, shop and more. Additionally, IBM has opened several worldwide
telecom solutions labs focused on research and development in areas related to
the mobile web.
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