Frost & Sullivan Analyst Briefing U.S. Consumer Mobile Content Markets - Opportunities and Challenges in 2009
 

Frost & Sullivan Analyst Briefing U.S. Consumer Mobile Content Markets - Opportunities and Challenges in 2009

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Frost & Sullivan Senior Analyst, Vikrant Gandhi, gives an analysis of the consumer mobile content market opportunity, understand what the emerging market opportunities are and understand what will ...

Frost & Sullivan Senior Analyst, Vikrant Gandhi, gives an analysis of the consumer mobile content market opportunity, understand what the emerging market opportunities are and understand what will continue to drive the industry forward.

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Frost & Sullivan Analyst Briefing U.S. Consumer Mobile Content Markets - Opportunities and Challenges in 2009 Frost & Sullivan Analyst Briefing U.S. Consumer Mobile Content Markets - Opportunities and Challenges in 2009 Presentation Transcript

  • U.S. Consumer Mobile Content Markets - Opportunities and Challenges in 2009 Vikrant Gandhi, Senior Industry Analyst Mobile and Wireless Communications March 31, 2009
  • Focus Points Current Financial Crisis – Impact on Mobile Content • and Services Mobile Data Services Analysis • Consumer Mobile Content Market – 2008 Review and • Future Forecasts Mobile Messaging Trends –SMS and MMS • Mobile Advertising and Mobile Search • Mobile Financial Services - Banking and Payments • Conclusion • 2
  • Current Financial Crisis – Impact on Mobile Content and Services 3
  • Current Financial Crisis – Impact on Mobile Content and Services It is incorrect to assume that mobile content markets are not • affected by the current economic downturn. A fair percentage of mobile content is purchased as part of • ‘discretionary spending’ budgets and this affects the consumer/buy side. The lack of credit facilities impacts crucial innovative companies • that drive innovation in mobile content markets. People need entertainment, information and communication • abilities and the mobile phone is the only converged portable device that provides all three “on the go”. The next six months will be crucial for the overall wireless • industry – unemployment rate is already more than 8 percent and people are waiting to see how things evolve. 4
  • Mobile Data Services Analysis 5
  • Mobile Data Services Revenues – The Growth Continues Mobile Service Revenues($ Million) Mobile Data Revenues($ Million) Contribution(%) 180000.0 40.0% 160000.0 35.0% 140000.0 illion) 30.0% ) 120000.0 Contribution(% Revenues($ M 25.0% 100000.0 20.0% 80000.0 15.0% 60000.0 10.0% 40000.0 5.0% 20000.0 0.0 0.0% 2007 2008 2009 2010 2011 2012 2013 Year Data revenues contribute around 25 % to the total mobile services revenue pie. In several cases, operators do not get any revenues (ex- Apple’s app store) – much also depends on revenue sharing terms. 6
  • Three Important Pillars of Mobile Data Services Mobile Data Services Mobile Mobile Mobile Data Messaging Content/Apps Plans & Others -Primarily SMS -Consumer and -Specific or and MMS Enterprise Bundled data based services applications plans -Done al-a- - Generally - Deliver max carte offered on a ‘value’ to or as part of a premium basis consumers data plan Mobile messaging and messaging-based services, premium mobile content and applications, and mobile data plans (messaging, mobile Internet, unlimited-everything, etc.) are the three most important revenue generators. 7
  • Three Important Pillars of Mobile Data Services (contd.) Mobile Data Plan Contribution (%) Premium Mobile Content Contribution (%) A-la-carte Messaging Contribution (%) 100% 90% Contribution (%) 80% 70% 60% 50% 40% 30% 20% 10% 0% 2007 2008 2009 2010 2011 2012 2013 2014 Year Majority of messaging is done as part of a data plan (messaging or bundled) and data plans continue to be the largest revenue generators. 8
  • Consumer Mobile Content Market – 2008 Review and Future Forecasts 9
  • U.S. Consumer Mobile Content Market - Segmentation Premium Mobile Downloadable Content and Applications Mobile Music Mobile Games Mobile Graphics Mobile Video Informational Services Services •Ringtones •Downloadable •Screensavers •Streaming •Sports/News/ •Ringback Tones (BREW/Java/ Financial •Wallpapers •Downloads others) •Full-track •POI/Navigational •Multicast •WAP-based •Downloads •Weather •Messaging- •Mobile Music •Traffic based Streaming •Others •Others 10
  • U.S. Consumer Mobile Content Market – Value Chain 11
  • Consumer Mobile Content Market – 2008 Review and Future Forecasts Total U.S. mobile data services market grew 38% in 2008. • U.S. premium mobile content market grew approximately 30% in • 2008. Revenue-wise, mobile games growth was the strongest though • relatively higher price-points also make them most vulnerable to a slowdown. Total On-deck U.S. Premium Mobile Content and Applications Market A $3.5 Billion market in 2008 Expected to approach $6.0 Billion in 6 years (2014) 12
  • Consumer Mobile Content Market – 2008 Review and Future Forecasts Mobile Music($ Million) Mobile Games($ Million) Mobile Video Services($ Million) Mobile Graphics($ Million) Mobile Informational Services($ Million) 6000 5000 Revenues($ Million) 4000 3000 2000 1000 0 Year 2007 2014 13
  • Premium Mobile Content- Off-deck vs. On-deck On-deck is clearly the leader in the U.S. mobile content markets. • Emergence of newer types of app stores has the potential to change • this equation significantly. The distinction between these two ecosystems is going away. • Mobile operators have embraced and accepted the potential of such • marketplaces to drive data revenues and are willing to add value to the overall customer experience. Independent app stores have been around for a few years now • (Handango, Pocketgear, Handmark, others). Entry/expected entry of heavyweights such as Apple, Google, Microsoft, • Nokia, Palm and others has helped stimulate growth in content, stimulated mobile advertising, driven greater data traffic and benefited the entire ecosystem. 14
  • Premium Mobile Content- Off-deck vs. On-deck Forecasts Off-portal Revenues-Without App Stores On-portal Revenues 6000 Off-portal Revenues-With App Stores* 5000 Potential Uplift of Revenues ($ Mn) approximately 4000 $1.7- $ 2.0 Billion per Year 3000 2000 1000 0 2007 2008 2009 2010 2011 2012 2013 2014 Year * Apple, Google, Microsoft, RIM, Palm, Nokia, Others App stores have a significant potential of driving content sales – as evident by the success of the Apple store. Other major participants will leave no stone unturned to offer innovative applications and services. 15
  • Mobile Messaging Trends- SMS and MMS 16
  • Mobile Messaging Trends – Messaging Volumes MMS Volume (Billion) SMS Volume (Billion) 3500.00 SMS ~ 3200 billion 3000.00 MMS ~ 100 billion Volume (Billion) 2500.00 2000.00 1500.00 1000.00 500.00 0.00 2007 2008 2009 2010 2011 2012 2013 2014 Year SMS continues to see exponential growth, while MMS grows steadily. Adoption of picture messaging in the U.S. is very high. 17
  • Mobile Messaging Trends –A2P/P2A vs. P2P Messaging 105.00% A2P SMS Volumes P2P SMS Volumes 100.00% Contribution (%) 95.00% 90.00% 85.00% 80.00% 2007 2008 2009 2010 2011 2012 2013 2014 Year Largely driven by short-code SMS based programs, A2P/P2A messaging contributes an estimated 1.5-2% to total messaging volumes. This is expected to increase during the forecast period. 18
  • Mobile Advertising and Mobile Search 19
  • Mobile Advertising and Mobile Search There is no doubt that the future is bright for the U.S. mobile advertising • markets. Some challenges have been a lack of global guidelines for mobile • advertising, inconsistent measurement of mobile advertising, to name a few. Expect resolution to the challenges soon. New types of inventory are continually generated. (Ex- third-party • storefronts such as the new App Stores). Advertisers is becoming more demanding and performance-based • advertising has a slight advantage under the present economic conditions. Messaging and mobile Internet, followed by In-application, mobile • search and mobile video advertising are the main channels. New advertising channels such as iPod Touch, mobile email and P2P • SMS will also be used. 20
  • Mobile Financial Services- Banking and Payments 21
  • Mobile Financial Services - Mobile Banking and Payments All leading financial institutions have a mobile ‘interaction’ strategy. • Messaging , mobile Internet and Rich-client are the three main channels • for m-banking. M-banking and m-payments are expected to converge and subscribers • should be able to perform a wide-range of financial services from a single interface. M-commerce needs to move beyond premium SMS to ensure a secure • and transparent payment mechanism. Business models continue to evolve and we will see newer monetization • mechanisms. 22
  • Mobile Banking Evolution and Roadmap S ta g e II - M o b ile b a n kin g a cce ss -Ale rts a n d No tifica tio n s - M o b ile Bill P a y - P 2P P a ym e n ts -M -Co m m e rce a n d M o b ile S ta g e 1 M a rke tin g - In te rn a tio n a l - M o b ile Re m itta n ce s b a n kin g a cce ss -M o b ile W a lle t -Ale rts a n d a n d Co n ta ctle ss No tifica tio n s P a ym e n ts - M o b ile Bill P a y 2006 2007 2008 2009 2010 2011 2012 Ye a r 23
  • Mobile Financial Services – Forecasts M-commerce Revenues ($ Million) Growth (%) 1000 0.7 900 0.6 800 Revenues ($ Million) 0.5 700 Growth (%) 600 0.4 500 0.3 400 300 0.2 200 0.1 100 0 0 2007 2008 2009 2010 2011 2012 2013 2014 Year At 1% of the total U.S. retail spending, goods sold via m-commerce are substantial. Improving payment mechanisms, dedicated m-commerce sites and a better end-user experience are some drivers. 24
  • Conclusion 25
  • Conclusion Data revenues will continue growing- perhaps even overtaking voice • revenues within a decade. Leading mobile operators clearly have adopted an ‘open’ strategy • tailored to drive data traffic on their networks. Messaging volumes will continue growing due to an increase in • proliferation of data plans. Leading device vendors and OS providers launching their own App • Stores help drive innovation and are a significant driver to watch out for. Mobile Advertising is still a new market – the inventory continues to • increase rapidly. M-commerce will evolve beyond PSMS and alternate payment • mechanisms will become more popular (even for mobile content purchases). 26
  • Next Steps Obtain a Frost & Sullivan Strategic Approach document for a Growth Partnership Service or Consulting Service to support you and your team to accelerate the growth of your company. (myfrost@frost.com) 1-877-GoFrost (1-877-463-7678) Join us at Frost & Sullivan’s GIL 2009: North America - Growth, Innovation and Leadership: A Frost & Sullivan Global Congress on Corporate Growth, September 13th – 16th, 2009, Hyatt Scottsdale Resort & Spa at Gainey Ranch, Scottsdale, AZ. (http://www.frost.com/gil) Register for the our next Chairman’s Series on Growth: The CEO's Growth Team™: Research & Development Driving Growth and Innovation (April 7th) (http://www.frost.com/growth) Register for a complimentary Frost & Sullivan’s Growth Opportunity Newsletter and keep abreast of innovative growth opportunities in your industry (www.frost.com/news) 27
  • Your Feedback is Important to Us What would you like to see from Frost & Sullivan? Growth Forecasts? Competitive Structure? Emerging Trends? Strategic Recommendations? Other? Please inform us by taking our survey. 28
  • For Additional Information To leave a comment, ask the analyst a question, or receive the • free audio segment that accompanies this presentation, please contact Stephanie Ochoa, Social Media Manager at (210) 247- 2421, via email, analystbriefings@frost.com. Follow Frost & Sullivan on-line at: • http://twitter.com/Frost_Sullivan • http://www.facebook.com/people/Frost-Sullivan/1131686497 • 29