March 22, 2007

Not Everyone Wants Those Wireless Toys

By Jim Barthold

There's a disconnect between the features service providers give cell customers and how those customers use their phones.

Next week's CTIA Wireless Show in Orlando, FL, will be littered with nifty applications designed for multitasking cell phone users. The problem is, according to a report developed by developed by market researcher Media-Screen, only five percent of people with Internet-enabled cell phones want to access the Internet with their phones.

Even more compelling (or disturbing if you're an applications vendor) is that Media-Screen found that 60 percent of users own Internet-enabled mobile devices but don't use online services; they just make calls.

Part of this disparity is simply geography. The U.S. broadband infrastructure provides plenty of wired and wireless access to the Internet that includes a full-screen, sound-enhanced experience that "far outweighs the value they're receiving on their mobile devices today," said Josh Crandall, managing director of Media-Screen.

It's different in the rest of the world where "the Internet and broadband Internet access is not nearly as mature or robust, so people are being driven to the mobile Internet," he said.

About that quality

A second part of the problem is that people don't want to pay more for mobile Internet and distrust the mobile quality of service - if that phrase, too, isn't oxymoronic.

These are what Crandall called "evolutionary problems the industry will sort out" eventually. "We don't see that dropped connections are going to be sorted out overnight and that the number of clicks to access content that's meaningful to users is going to be sorted out overnight; we still think there are a number of hurdles facing carriers and handset manufacturers."

When U.S. consumers do access mobile Internet, they revert to 1990s' computing models: 47 percent send email, 27 percent play games, 16 percent read the news, and for those in the cable industry paying attention, 13 percent watch television. That's not the usage model being hyped in Orlando, and it could spell trouble for newcomers with shallow pockets.

"It's a very competitive marketplace, and it's also very capital-intensive, so start-ups need to be highly leveraged in both access and also in the amount of capital they have to sustain in a longer term adoption curve," Crandall said.

It will happen

The mobile Internet market will develop, he added, but it won't follow a path prescribed by "advertising that promotes a lifestyle which requires mobile Internet connectivity for the consumer population. The killer apps are currently not the sexy apps such as video on your phone or the entertainment types of applications that are being pushed in the media today. It's more about the utility of the phone for local information, search capabilities, news and weather and lot of those types of applications that people need immediately here and now."

In other words, it's about making phone calls and maybe, instead of calling to check the local weather, accessing that information via a Web link.

- Jim Barthold