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July 21, 2010

According to IDC, global SMS (short message service) utilization is still growing, and that includes messages sent to and from so-called short codes. And overall, wireless users in Canada sent a little over 35.2 billion text messages last year alone, according to the CWTA (Canadian Wireless Telecommunications Association).

That's about a 70.2 percent increase from 2008's 20.8 billion text messages sent by Canadians. There's now little doubt that text messaging represents an important communication feature for wireless users regardless of the sophistication of their cell phone or mobile handset.

SMS is now standard on every mobile phone or MID (mobile Internet device) and on any network in the country, and it requires no special software or downloads on the part of the user.

Smartphones such as the iPhone, the BlackBerry and a few more have greatly influenced the way people now access Internet content and apps but they still don't have as much of an impact on the effectiveness of the marketing message that is delivered via a particular application.

There are still many steps that a person has to go through to download these applications and with over 200,000 of them available in the Apple App store alone, Internet marketers face the added challenge of breaking through the 'mobile noise' in order to be heard.

But the rapid evolution of handset technology has now created a very compelling reason for marketers to embrace advertising apps and for mobile developers to explore the limits of the tools available to them.

MID and mobile handset makers are now changing their business models to attract more app developers and wireless carriers are now rushing to update their networks to handle even more SMS and data traffic.

And even despite the pre-order and shipment numbers of new MIDs, it's clear now that mobile technology is rapidly moving ahead of social Net' adoption with an average market penetration of less than 21 percent of users, according to IDC.

Canadian phone companies have now started to embrace the low-cost, basic-feature cell phone market. A resurging amount of talk-and-text products are now being offered by larger players, including Rogers, Bell Mobility and Telus, which only a few short years ago were focusing on data-heavy offerings for their wireless users.

Additionally, new telecom players coming to Canada including Wind Mobile, Mobilicity and Public Mobile are positioning themselves as budget cell-phone carriers with the unlimited talk-and-text model and are quickly being undersold by the Big Three.

And new competition and cross-border price wars are also attracting mobile subscribers who would like to pay less for cell phone service.

This subscriber segment is a very basic user, with simpler, more down-to-earth needs. These are the exact same people interested in receiving price discounts, cash vouchers, coupons and other special offers and rebates from marketers, the ones who are interactive with their customer service needs and that are always looking for a way to reach the brand.

If wireless carriers are creating more “all you can text” mobile plans, then why not join in the conversation and text your potentially new customers using their preferred medium of choice?

LBS is here to stay
According to a new research brief from Berg Insight produced in June, LBS (location-based services) in Europe are expected to grow rapidlyover the next four to five years.

Berg Insight notes that it expects LBS service revenues for the segment could grow at about a 12.2 percent compound annual rate from approximately $270 million last year to about $515 million in five years from now.

The research firm also noted that the revenue model for LBS is shifting from a premium add-on to an advertising-funded model.

This is mostly highlighted by Google, which has a history of offering its Google Maps application for free to consumers and has recently began providing turn-by-turn navigation through its Android operating system.

The move is also echoed by Nokia for its devices.

The research firm cited local search, GPS navigational services and social networking as the drivers for the market and that it expects about 35 to 40 percent of all European mobile subscribers will use some sort of location-enhanced application on a regular basis in four to five years from now.

“LBS are finally on the verge of mainstream acceptance,” said André Malm, Senior Analyst, Berg Insight. “Increasing sales of smartphones and the iPad are driving end-user awareness of mobile Internet services and applications in general. On-device application stores enable access to mobile services for a broader audience at the same time as flat-rate data plans make pricing more transparent. More and more mobile developers are now adding location support in their applications to enhance the end-user experience.”

However, Berg Insight did warn that revenues may not grow at the same rate as usage in the mobile advertising segment is still in its infancy, especially in Europe.

“It will probably take a few years before a really successful business model has been established that allows mobile advertisers to reach out to a critical mass of active users,” Borg added.

“This is especially the case for emerging location-based advertising,” the firm said.

According to a report from WiseHarbor Research, overall, wireless broadband technologies, including LTE, HSPA and the CDMA 2000 1x EV-DO implementation are should be dominating the mobile segment until at least 2020, though the rise isn't expected to hit its peak until about 2015, however.

WiseHarbor, which laid out a number of forecasts for the next ten years, said it expects mobile broadband technologies will actually bridge the digital divide through the current decade for Web and data communications by 2020.

It also added that this will follow the lead that GSM and CDMA 2000 1x achieved in the voice and text messaging segment.

The Asia Pacific region is also expected to lead the world in mobile broadband and LTE device sales beginning in 2011, according to the report, which added that developed nations will lead in devices sold per capita.

On the other hand, global revenues from mobile handsets, wireless modems and embedded modules is expected to peak in in about five years before being hit by dropping selling prices and saturated demand.

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Source: SNE.