Mobile Internet 2010

Mobile Internet 2010

This report discusses significant trends and initiatives in usage and applications of mobile internet during 2008, and what development can be expected in the coming years. These are exciting times: the mobile web is coming of age, patterns and preferences in user behaviours and preferences are emerging and it is possible to start discerning market trends and with greater detail predict coming development.

The number of PCs in use worldwide has surpassed 1 billion and there are one and a half billion internet users globally. At the same time there are more than 4 billion mobile subscribers, indicating the vast growth potential for mobile internet, especially considering that 58 percent of the world's installed PCs are in markets that account for only 15 percent of the world's population, meaning that for a majority of the potential users the handset is their main internet terminal.

The global migration to 3G is also picking up pace and the base of WCDMA 3G subscribers more than doubled during both 2006 and 2007. By June 2008 there were more than 235 million WCDMA subscribers, representing a 6.4 percent penetration looking at all mobile subscribers worldwide, and 11 percent if only considering WCDMA markets. Furthermore the number of EVDO subscribers was about 100 million in mid-2008.

Faster networks alone are however not enough to stimulate the uptake of mobile Internet. Even among the 3G subscribers in the Western world, the share of mobile Internet users remains low. This confirms that it is vital that service providers, operators and handset manufacturers ensure that the overall experience of the first-time user is smooth, intuitive, reliable and confidence-inspiring. Berg Insight recommends that services are designed so that there is a straight-forward and guided way to access attractive contents for the first-time user, bypassing complex applications and advanced features until the user is ready for them. One way of achieving this is through free broadcasting services or widgets, making attractive contents available with one click on a running teaser-banner.

Mobile surfers in Western markets are to a large degree fixed Internet users that use the mobile device as an alternative channel. There is a larger degree of mobile Internet users among the general population of internet users than there is in the general population of mobile users. It is therefore important for mobile service providers and operators to recognize that it is the PC and what users see and come across there that to a large degree inspires and motivates what they do on the mobile internet and what they expect from services there. The report discusses significant internet trends that application designers and providers need to consider regardless of from which terminal their users access their services. One such trend concerns how social services become more sophisticated and content sharing is evolving into content collaboration; another one is that information is increasingly becoming available for free while filtering and attention are value-added features that come with a price.

When introducing mobile services that are established in the fixed world and marketed as such, customers will expect to find familiar content titles and similar features. As exemplified in the report, service providers should not be afraid to exploit cross-over recognition to attract fixed users to the portable net. Berg Insight believes that any operator trying to limit access and keep the user from his or her favourite Internet sites and applications will lose in the long run.

But to create new user behaviours it is not enough just to be present on both fixed and mobile with the same features and look-and-feel, but the fixed and mobile qualities should complement each other. Berg Insight believes that presence is a key feature that has the potential to transform mobile applications for communications, such as instant messaging and e-mail, as well as for example social networking and advertising. With presence and location information connected to e.g. the entries in the phone’s address book, we can imagine one single application to integrate all communications and social functions, which adapts to the availability of different contacts, selecting appropriate communications modes depending on context.

Currently the mobile Internet market is fragmented between operators, Internet players and content aggregators trying to find a way to get on to the small screens, but in a not too distant future, handset-embedded browsers and automatic re-directs to mobile-adopted sites will make the surfing experience smooth regardless of terminal. Then the users will select and stay with mobile services that give them what they have come to expect from the Internet (browsing, e-mail, IM, media, networking…) with the addition of inherit differentiators of surfing-on-the-go - such as instantaneity, personalisation, location, efficiency in presentation - into added value. The challenge for service developers and providers will be to design, package and introduce these features so that they become a natural and easily accepted evolution of online communication, which will require a deep understanding of how users communicate and how they interact with mobile technology. It will be crucial that in an already complex networking environment, adding e.g. presence as a mobile feature increases control and simplifies, not the opposite.

It is important to not overlook the emerging markets which comprise the majority of the world’s mobile users and is the fastest growing one. Surveys consistently show that the largest interest for data services over mobile handsets is found in emerging markets, where undersupplied fixed infrastructure makes the portable phone a viable utility for many practical applications, not just communication but also banking, entertainment, commerce and similar. However, since these users often do not come from a PC background, and often do not have PC-based internet experience or any fixed access alternative, their expectations are fundamentally different and the markets consequently behave differently.

Similarly, there exists in all geographical markets a significant segment of mobile users without PC background or access. With the right easily understood, service-focused introduction, the familiar and non-intimidating mobile phone is well positioned to enable data services for communications, media sharing, information and similar. In areas with mature mobile usage this segment, comprising for example elderly, has generated a substantial market, not only in adapted mobile terminals and services, but also in peripheral mobile-centric equipment such as printers and speakers. 
 

Table of Contents

List of Figures

Executive summary

1 Introduction

1.1 General Internet trends: Market still evolving

1.2 Infrastructure: Coming in place

1.3 Usage: Increasing for handsets, exploding for notebook PCs

1.3.1 Notebook PCs drive the mobile broadband revolution

1.3.2 PCs inspire and motivate mobile usage

1.4 Operators: Becoming more creative

1.4.1 Attractive data plans

1.4.2 Complete user experiences

1.4.3 Free content financed with ads

2 Information browsing and search

2.1 Browsing

2.1.1 The users: Mobile surfers are foremost fixed users

2.1.2 Behaviour: Mobile access is a complement, not a replacement

2.1.3 The contents: Info accessed via mobile often of here-and-now character

2.1.4 The market: Fragmentation, and portals still in the game

2.1.5 Product creation: Information is free; attention and filtering cost

2.1.6 Challenges: Protecting children will become an issue

2.2 Search

2.2.1 The users: The Google generation is impatient and volatile

2.2.2 Behaviour: New technology is transforming established processes

2.2.3 The market: Search is the money maker

2.3 Widgets: The new information applications

2.3.1 A phenomenal success on PCs

2.3.2 Transferring widgets to the mobile domain

2.4 Strategies

2.4.1 Google: Working for an open mobile ecosystem

2.4.2 Microsoft: Adding location to search

2.4.3 Yahoo: Betting on portal

2.4.4 Nokia: Trying to become the Yahoo of mobile

3 E-mail and instant messaging

3.1 Introduction

3.2 Mobile e-mail trends in 2009

3.2.1 Market: Developing countries will see faster uptake

3.2.2 Devices: Design matters

3.2.3 Business users: Companies are getting it mobile

3.2.4 Private users: Waiting for a better experience

3.2.5 Usage: Services create demand

3.3 Mobile IM trends in 2009

3.3.1 Usage: Not an SMS replacement

3.3.2 Services: Presence becoming a differentiator for integrated communication....55

3.3.3 Challenges: Interoperability a key factor

3.3.4 Devices: Specialisation encourages usage but does not sell

3.3.5 Software: Debate on web-based vs. device-client still on

3.3.6 Business models: Operators approaching Internet model

4 Social networking

4.1 Introduction

4.1.1 Services: Towards higher specialization

4.1.2 Usage: Evolving from sharing to collaboration

4.1.3 Music: Communities drive sales

4.2 Social networks in the mobile domain

4.2.1 Market: Large growth potential

4.2.2 Service design: Porting is a challenge

4.2.3 Content: Archiving and access becomes a service

4.2.4 UGC: Compatibility crucial

5 Music, video and TV

5.1 Introduction

5.1.1 Market stymied by inflexibility

5.1.2 Content aggregators are preparing for the demise of ringtones

5.1.3 Providers become producers

5.2 Music

5.2.1 Lack of vision holding back the market

5.2.2 Simple playback device or download terminal?

5.2.3 Handset makers step in as service providers

5.3 Video and TV

5.3.1 Viewing preferences carry over from fixed TV

5.3.2 Catch-up TV proves to be VOD killer service

6 Conclusions and predictions

Glossary