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Avo Reid

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The Era of the Mobile Web

May 24, 2008

IBM recently released a new study titled, "Go mobile, grow... Should mobile internet services be the next big growth gamble for mobile device makers".   The IBM Institute for Business Value surveyed nearly 700 consumers in the United States, Japan, India, China and Germany on their current satisfaction and preferences of the mobile internet.

Only 20% of consumers surveyed indicated that they were "very satisfied" with their current mobile services, the remaining 80% of consumers were split between "somewhat satisfied (40%)" and varying levels of dissatisfied (17%) and non-users(23%). When asked "What stops you from using mobile Internet more often than what you do today?" 50% of consumers indicated it was too expensive, 40% indicated the connection was too slow, 37% indicated they didn't find it convenient and 17% indicated they had tried it but didn't find it useful.

Despite the low level of satisfaction with the current state of the mobile Internet the study estimates that 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. 

The market forces feeding this growth include:

  • A growing number of mobile Internet users:

    The next generation of "digital natives" is leading the way, these are users who have grown up accustomed to using mobile devices to access digital content and applications on the mobile Internet.  Their expectations of the mobile internet are much higher than any generation before.  

    In mature markets, the study predicts users will increasingly use the mobile Internet to extend their personal computers. Microsoft for example is looking to capitalize on this trend through a new service called Microsoft Mesh which provides a set of personal Internet services and software creating a seamless connection or mesh between the desktop and the consumer's mobile devices.

    In emerging markets like India and China, consumers are skipping the PC and going straight to high-end mobile platforms that deliver the same services they might have found in their first PC. A significant percentage of the world's population may first experience the Internet on a mobile device.
  • A growing number of internet ready mobile devices:

    The next generation of mobile devices coming onto the market today can support mobile internet applications, especially rich internet applications which use the back-end computing power of the internet "cloud".  According to the study Smart phone shipments are expected to grow at about 25 percent annually and reach 150 million units by 2009.  These new devices have the increased computing power and storage capacity needed to extend the desktop.
  • Faster wireless broadband networks anytime, anywhere:

    Connection speed and convenience were major road blocks to mobile Internet usage according to the study. The increasing ubiquity of faster wireless broadband like 3G and WiMax will play a major role in the increase usage of the mobile Internet. 
  • Improved, easier to use human interface:

    Innovations like rollable screens and nano projectors are driving to make the  "Fourth Screen" a reality ( the first screen being the movie screen, the second the television screen and the third the PC screen.)
    Combined with other innovations like virtual keyboards, voice recognition and multiple touch screens the human interface to the mobile internet will diminish as another major road block to adoption.
  • More reasonable pricing for using the mobile Internet:

    The competition for the mobile Internet is fierce and includes some of the world's most prominent brands, such as Google, Apple, Vodafone, Nokia, RIM, Yahoo and MSN in addition to the plethora of other network providers and mobile device makers.  Competition for market share will require competitors to provide attractive pricing that creates a strong value proposition for customers. The study predicts that a transition from volume-based pricing to flat rate data tariffs will kickstart an upward cycle in mobile Internet usage which will in turn make the mobile Internet more attractive to content providers.
  • More applications, more choice, more customization:

    A key finding in the study reveals 80 percent of consumers would prefer a service provider that gave them more choice in the applications and services available on their mobile devices, and 69 percent of consumers going further to state their preference for devices that are open to personalization and configuration of applications.  An interesting note according to the study, three of the top five ranked mobile internet service offerings  are from companies focused on software, Google, Yahoo and Microsoft, the remaining two are mobile device makers Nokia and RIM.


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