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  1. 1. Mobile Content Delivery 101 Mobile is personal, interactive, engaging and most importantly – always with you. Think of mobile FIRST, not last. This paper will discuss the future of mobile content, mobile advertising, and the three main challenges of mobile content distribution. An Internap White Paper ©2009 Internap Network Services Corporation. All rights reserved. 877.THE.PNAP (877.843.7627) internap.com
  2. 2. Mobile White Paper Table of Contents Terminology in this White Paper............................................................................................3 Why Mobile Content?..............................................................................................................4 “MOBILE INTERNET IS THE NEXT COMPUTING CYCLE”...........................................................................4 MOBILE CONTENT = INCREMENTAL IMPRESSIONS.................................................................................4 MOBILE ADVERTISING AND MARKETING..............................................................................................5 What Are the Challenges to Mobile Content?........................................................................5 CHALLENGE 1: NEW MOBILE DEVICES AND OS UPDATES....................................................................5 CHALLENGE 2: NO STANDARD MOBILE OS, PLAYER, OR FORMAT...........................................................6 CHALLENGE 3: NETWORK COVERAGE WILDCARD................................................................................6 LTE – LONG TERM EVOLUTION......................................................................................................6 Conclusion ..............................................................................................................................7 About Internap.........................................................................................................................7 About the Author.....................................................................................................................7 Sources.....................................................................................................................................7 2 2
  3. 3. Mobile White Paper Terminology in this White Paper 3G – Term describing mobile data networks with a minimum downlink speed of 384 kbps, but most commonly used in association with Global System for Mobile (GSM) high-speed data. 3GP – Third generation video standard multimedia container format defined by 3GPP for use on 3G mobile phones. Also playable on PCs and MACs using programs such as QuickTime® or RealPlayer. (Extensions: *.3gp – GSM network standard, *.3g2 – CDMA network standard) 3GPP – Third Generation Partnership Project – Organizations collaborating to produce technical specifications for Long Term Evolution (LTE). CDMA – Code Division Multiple Access – This technology is the network technology currently used by Verizon® Wireless and Sprint® / Nextel® in the U.S. CDMA is a "spread spectrum" technology, allowing many users to occupy the same time and frequency allocations in a given band/space. As its name implies, CDMA (Code Division Multiple Access) assigns unique codes to each communication to differentiate it from others in the same spectrum. In a world of finite spectrum resources, CDMA enables many more people to share the airwaves at the same time than do alternative technologies. CDN – Content Delivery Network EV-DO – Evolution Data Optimized is a data transfer rate term used by CDMA carriers to describe mobile data uplink speeds of 300-400 kbps. GSM – Global System for Mobile communications – This technology is the network technology currently used by AT&T® and T-Mobile® in the U.S. and is the most widely used mobile network technology used around the world. GSM uses digital technology and time division multiple access transmission methods. GSM is a circuit-switched system that divides each 200kHz channel into eight 25kHz time-slots. GSM operates in the 900MHz and 1.8GHz bands in Europe and the 1.9GHz and 850MHz bands in the US. The 850MHz band is also used for GSM and 3GSM in Australia, Canada and many South American countries. H.264 – Codec designed to provide higher quality at lower bitrates and is equivalent to MPEG-4 Part 10, or MPEG-4 AVC. LTE – Long Term Evolution – Next generation of Mobile network technology. OEM – Original Equipment Manufacturer – Popular terminology in the mobile industry to represent mobile device manufacturers such as Motorola®, Palm®, Nokia®, LG®, and Samsung®, among others. OS – Operating System – As a desktop computer has an operating system, mobile devices also have their own operating systems. RTSP – Real Time Streaming Protocol – Network control protocol providing streaming for media and entertainment systems to control streaming media servers. 3 3
  4. 4. Mobile White Paper Why Mobile Content? “Mobile Internet is the Next Computing Cycle”i Mainframe > Minicomputer > PC Internet > Mobile Internet “Mobile Data Traffic Will Double Each Year from Now Through 2012”ii 3G device adoption has grown double digit percentages just in the past year with iPhone leading the way in Mobile Internet usage. 87% of iPhone users cite Mobile Internet as one of their main data activities.iii Additionally, Aberdeen recently reported, “mobile internet has now reached critical mass.” iv Mobile Content = Incremental Impressions Walt Disney® Company’s ESPN® research shows that consumers are adopting “best available screen” and changing platforms (TV, Internet, Mobile Internet) depending on best available access at the time and place they choose to watch.v In 3Q and 4Q 2008 television viewing continued at an all-time high at over 151 hours of TV per month, while Internet and mobile phone video viewing is increasing rapidly. Although Internet video viewers outnumber Mobile viewers, Mobile viewers watch almost one hour more per month than Internet viewers. 54% of Mobile video viewers are between the ages of 25-44, slightly dismissing the myth that mobile video is for teenagers. (19% of mobile video viewers were ages 12-17.) 6 4 4
  5. 5. Mobile White Paper Mobile Advertising and Marketing Mobile advertising and marketing will be the lifeblood of this rich media space. Industry executives expect more than a quarter of ad budgets to move from traditional outlets to digital media. Unlike TV or radio advertising, there is usually only one viewer per device, thus giving the marketer an opportunity to provide a customized, personal, and relevant experience. Currently only 22% of companies have implemented mobile advertising programs, and of those 22%, 36% started mobile advertising within the last 6 months. 5 Most advertising will target the 18-34 age group; they are high adopters of technology willing to spend their disposable income on the latest tech gadgets and use them to their fullest extent. By 2013, mobile search advertising revenues will grow to $3.1 billion by 2013. Since the 2008 figure was $160 million, this equates to a compound annual growth rate (CAGR) of 81.2%. As with traditional Internet advertising, search engines fuel the growth of mobile advertising.vi What Are the Challenges to Mobile Content? In this section, we will discuss the three main challenges: • New mobile devices and OS updates released frequently • No standard OS, players, or formats • Network coverage and competing for tower bandwidth a wildcard Challenge 1: New Mobile Devices and OS Updates Thanks to capitalist competition, handset manufacturers (Original Equipment Manufacturer or OEM) are constantly inventing, manufacturing and releasing for sale new mobile devices. More so in countries that do not have government entities approving each and every mobile handset. The major handset manufacturers are Nokia®, Research in Motion (who manufactures the BlackBerry® smartphone), Apple®, Motorola®, HTC®, Sharp®, Fujitsu®, LG®, Kyocera® Sanyo®, Pantech®, Sony Ericsson®, Samsung®, and Palm®. This presents a challenge since most handset manufacturers have developed their own proprietary OS and custom variations thereof sometimes varying per handset model or version. It is not uncommon for an OEM to create version 1.0 for handset X on one carrier’s network and then version 1.1 for the same handset on a different carrier’s network. Additionally, some OEMs are releasing OS updates directly to their customers on a monthly or quarterly basis. While open-source OS such as Android is gaining popularity, the vast majority of handsets in the U.S. – Apple iPhoneTM and BlackBerry smartphones both have proprietary operating systems. While it may be feasible to develop a solution for one or multiple OS and handsets, the rapid changing environment of the mobile technology creates difficulty to keep up. Therefore, a partner who is focused on changes is essential to success. 5 5
  6. 6. Mobile White Paper Challenge 2: No Standard Mobile OS, player, or format. Mobile device manufacturers do not follow the PC standards of operating systems. Most PCs run on a version of the Windows operating system*. For example, the iPhone’s operating system is Apple’s proprietary OS, also known as OS X for iPhone. BlackBerry smartphones operate on the BlackBerry proprietary OS, also known as BlackBerry OS 4.1, 4.3, 4.x, etc… The only glimmers of standard operating systems are Android (which is open source) and Windows Mobile (which has been carried by Motorola, HTC, Palm Treo, Pantech handset manufacturers). Nokia handsets are loaded with the Symbian OS. OEMs create their own proprietary operating systems, which leads to creating their own proprietary media players in which they determine which audio/video formats are compatible with their device. 3GP is gaining ground as the industry standard, but just among the smartphones, Windows Mobile devices play *.wmv files, while iPhone handsets play *.m4v (and other QuickTime formats), and BlackBerry smartphones play *.3gp formats. It should be noted that the 3GP format also utilizes RTSP streaming while the iPhone QuickTime player utilizes HTTP progressive download. Adobe® Flash®, which runs on the vast majority of PCs, has developed a Flash Lite player designed to run on mobile devices. Adobe has started the Open Screen Project in an attempt to unite the mobile content world and is scheduled to have a new player available for testing by year-end 2009. Challenge 3: Network Coverage Wildcard The challenges of network coverage are vast and go further than the depths of this paper, but to summarize, streaming content is a high-bandwidth proposition, and requires the best network (3G for GSM or EV-DO for CDMA) possible. Network coverage is dependent upon not only the signal strength, but the signal can be lowered by many factors including topography, sunspots, buildings, etc. Assuming that none of these factors are in play, then consider how many other devices are also in range of the same tower. Unfortunately, there is only so much bandwidth to be shared among all the users in range of any particular tower. The bright beam in this challenge is that the Mobile Network operators have spent millions of dollars to continue to upgrade their networks to the highest speed and greatest bandwidth technology provides. What is the next generation for improved network bandwidth and speed? LTE – Long Term Evolution LTE is the next generation of network technology (4G) with data speeds of up to 100Mbps uplink and 50Mbps downlink. LTE will provide users with an experience similar to that of fixed line broadband both in terms of bandwidth and latency, and will support services including web browsing, FTP, video streaming, VoIP, online gaming, real time video. At the time of the writing of this paper, LTE is due to be launched in the U.S. by both Verizon Wireless and AT&T Mobility in the year 2010.vii 6 6
  7. 7. Mobile White Paper Conclusion Although there are many challenges to mobile advertising and mobile content, the mobile network is continuously improving and adoption rates are still increasing at a significant upward trend. • There is overwhelming evidence that mobile content and advertising will move from emerging technology to mainstream as 3G (and future LTE) capable device adoption grows. • LTE is not immediately available, but has the potential to supersize bandwidth and resolve latency issues seen today. • Now is the time to start investing in mobile marketing programs, as the market is not saturated with other advertisers. • The advantage to mobile marketing is that mobile devices are usually with their owners, always on, and always connected. About Internap Internap is a leading Internet solutions company that provides The Ultimate Online Experience™ by managing, delivering and distributing applications and content with 100% performance and reliability. With a global platform of data centers, managed Internet services and a content delivery network (CDN), Internap frees its customers to innovate their business, improve service levels, and lower the cost of IT operations. More than 3,000 companies across the globe trust Internap to help them achieve their Internet business goals. For more information, visit www.internap.com. About the Author Caroline Dunn is Director of Product Management for Internap. Previously she held product management roles at a major GSM wireless network carrier and a mobile virtual network operator in CDMA technology. Caroline is a member of the Wireless Technology Forum. Contact Info: office: 404-302-9700, email: cdunn@internap.com * Windows is a registered trademark of Microsoft Corporation in the United States and other countries. Sources 7 7
  8. 8. i “Technology Trends” Morgan Stanley Research: September 16, 2008 ii Cisco® Systems Visual Networking Index Forecast for 2007-2012 iii “Wireless Apps and Mobile Media” Nielsen Mobile: 2008 iv “Mobile Marketing: Going Direct to Consumers’ Hips, Pockets and Purses” Aberdeen: Oct 2008 v “ESPN Unveils Online Vs. TV Scores, Finds It's No 'Zero Sum' Game” MediaPost News: Dec. 4, 2008 vi “Mobile Local Search Ad Revenues to Reach $1.3B by 2013” BIA Kelsey Group: Feb. 25, 2009 vii “Beyond Mobile Broadband” Motorola®: 2008

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