Resembling a United Nations conclave, flags flew high at the recent MobileMonday (www.mobilemonday.net) Global Summit, befitting a thoroughly international event. Corporate executives, MobileMonday chapter heads, developers, early stage companies, financiers and vendors from around the globe gathered in Helsinki to assess the mobile industry, generate new business and network. With dozens of countries represented, interconnectedness remained the watchword-- panel discussions, presentations and pitches reflecting the community’s scope.

The MobileMonday (sidebar) business development network has grown exponentially since its inception in 2000. And the group continues to gain ground, cementing cooperative relationships with other globally influential organizations like GSMA (link to short) and OMA.

"The world is a de facto single mobile market," observed attendee and MobileMonday Tokyo(www.mobilemonday.jp) co-founder Daniel Scuka. "The carriers - who, after all, are the ultimate coordinators of the mobile content value chain - can no longer afford to invest in a service, a business plan or a concept that only encompasses a single market or single chunk of geography. Look how Deutsche Telekom and the other European carriers have jumped onto the iPhone rather than trying to do it themselves."

Trend Talk

Variations on a theme dominated: mobile’s inevitable convergence with the Internet. In his opening presentation, "Future of the Mobile Industry," Gartner’s Lars Persson, Managing Partner in Sweden, stated that operators "lack clear strategic vision" regarding convergence, calling the climate a "web of wireless confusion."

Speakers on the following panels disagreed on the timeline, but agreed on a shift in focus toward consumer behavior, including social networks and user generated content, even while admitting the latter mostly web driven for now. Scuka emphasized that convergence is happening at the software level, not "in the boring way that everyone's been talking about for years" in which devices merge into "some sort of Frankenstein, hyper do-all device," but rather as "Web 2.0 extended to the pocket." Others support his contention that this direction, coupled with the move to 3G & 3.5G, indicate that while carriers' power wanes, content owners are better positioned. "A carrier without content is just an empty bitpipe."

Social Media panel moderator Christopher Billich concurred. "The walled garden models many operators still run on today are in the process of crumbling big time," said Billich, VP, Overseas Development for Infinita (http://www.infinita.co.jp/en/). "Operators will transform into either content/service aggregators--a strategy Japanese operators have been highly successful with for almost a decade--or relatively dumb bit pipes."

But as Nokia’s Mark Ollila, a Director in the company’s games group, maintained, "If Content is king, Distribution is King Kong." Participants acknowledged that equally important trends toward mobile computing, more sophisticated devices and added value services, coupled with the need for faster, cheaper bandwidth, have been accelerating market innovation.

No where has that innovation been pushed faster than in Asia. Japan in particular still leads by most measures, with success stories to be found throughout. China, too, is on the rise, with IM as the entry point for many activities, according to Bruno Bensaid, a partner at China Expansion Fund and founder of MobileMonday Shanghai. (link to China Snapshot). Eastern Europe, Russia, the Ukraine(Ukraine Snapshot) and surrounding regions also boast thriving development, witnessed by home-grown Finnish and Swedish presenters at the Summit, as well as those in a Summit excursion to St. Petersburg(St. Petersburg Snapshot).

The U.S.,meanwhile, has some catching up to do. "Being at this summit just reinforced for me how far behind we are with regard to carrier adoption of new technology," said Los Angeles MobileMonday (www.MobileMonday.la leader Sarah Miller, President, Axis Marketing & PR. "U.S. players need to find better ways to work with carriers, and to get past barriers to entry when it comes to delivering mobile content and entertainment."

Still, most countries struggle with standardization issues, licensing complications and of course privacy, piracy and digital rights management hurdles. Impediments notwithstanding, said Lawrence Cosh-Ishi, leader of MobileMonday Tokyo, "in the most Wild West sense…all players are moving to stake turf and experiment with new business models for this medium."

The wild card remains the youth market, which builds whole new usage patterns and repurposes applications in unforeseen ways. What happens to the business, Justin Oberman, Mopocket.com (www.mopocket.com) asked the Social Media panel, when you "take the talk out of mobile?" and address a wholly new customer base that thrives on "continuous partial attention."

B2B Rules

Moreover, preoccupation with the youth segment distracts discussions from B2B applications, which Gartner’s Persson outlined as a growth opportunity. He said while demand is either weak or unclear for extra media services, in contrast mobile knowledge workers are seeking value—productivity, communication excellence across platforms. Gartner expects enterprise mobile devices to be a realistic way to combine or replace the PC with one integrated device. The Summit included case studies in enterprise integration for manufacturing (Avecon), supply chain RFID (Ponsec), and other fields coming out of research, such as eLearning, remote medicine and even a Seeing Eye phone.

Of course, these and the more glamorous entertainment/social applications are all heavily data dependent. Several speakers observed that in order to gain greater long-term revenue operators should change their approach and offer flat rates on data, mobile email and other business friendly services even though in doing so they’ll sacrifice short-term gains from access and SMS revenues. Furthermore, presentations on developing nations emphasized that vast numbers of people want nothing more than simple text-based services to improve their quality of life.

Transactions

Emerging services entail simple micro-payments or commercial transactions. While some panelists alluded to mobile retail via RFID embedded chips, outside of Asia most are waiting for commerce deployments. For the most part, the notion of using transactions was discussed as part of content marketing programs, entertainment event ticketing, and product promotions rather than shopping or an avenue for direct response advertising. In Japan, reported Madanmohan Rao during his Asia markets discussion, the phone already serves not only as a wallet, but a digital shoplifting device through picture functions. In Bollywood, ringtone music sales top those of CDs. (Christopher Billich notes that in Japan the market volume of mobile commerce generated by shopping and auction sites is about 1.5 times the annual total revenues from mobile content).

Nokia’s Ollila had previously outlined a few content models to come that will take advantage of the backchannel, such as "Try and Buy" and renting. Along those lines, COO Leif Fagelstedt introduced the groundbreaking Blyk (http://about.blyk.com/). The free pan-European operator derives revenue from targeted advertising, amplified through what Fagelstedt calls a "secret sauce" which appears to be sophisticated affinity programs coupled with user transactions. Bruno Bensaid later speculated that if successful Blyk’s model could spawn a whole new generation of MVNOs.

Self-Generating Societies

Blyk’s approach in integrating brands into a shared experience points the way for next generation mobile program generally. The integration of advertising and programming seen on broadcast television and the Web holds the same allure for mobile content aggregators, with many jumping into the fray. However, while the aggregation and projected growth of video on mobile devices preoccupies content holders, regulations, standards and piracy concerns have kept U.S. rollouts slow. Elsewhere, too, entertainment continues to be uneven revenue driver. Consequently, throughout the Summit social networking with video components and user generated content took center stage.

Emerging companies presenting such as Floobs, SoonR, QIRO, mCasting, Fromdistance, offer video solutions, and Fring’s (link to Q&A) intriguing free VoIP model could well be a Trojan horse winner for a host of other services. With the increased variety and complexity of the mobile web come predictable hazards, such as an apparent black market for expensive ringtones Nidal Barake of Caracas encountered. The Japanese contingent contends blackmarkets are unheard there of due to operators offering a more favorable revenue share with content providers.

The logical step in integrating multiple media will be the increasing blurring of real and virtual worlds, according the Atakan Cetinsoy, VP of MyStrands (www.mystrands.com). Centinsoy sees the social aspect of social networking supplanting the tech efficiency quotient. "The connection will be person-to-person," he said in his "Future of Mobile Communities" presentation. "We won’t be linking documents. That’s why it’s important to respect micro-niches and embrace taste-based marketing based on the shared wisdom of the crowd, using social recommendation and collaborative filtering."

How Fast, How Far

How fast and how far this next generation of social interactivity will be infused with video remains to be seen, but most experts predicted it will take awhile for ubiquity. "The infrastructure is insufficient for mobileTV to be real business in near future," commented Sarah Lipman of Power2B, based in Israel. "Hardware is still an issue, and keys are suboptimal for creating immersive experiences."

But no one denied that the race is on for "more of everything," Lawrence Cosh-Ishii predicted. "Increased awareness, greater adoption, faster speeds, lower data costs. If Japan is any indication….then mobile commerce with imbedded RFID payment solutions and mobile TV that is not IP streaming but terrestrial broadcast digital quality and freely available, combined with text and graphic interactive menus, would be the two most likely service evolutions."

Along evolution lines, researcher Dr. Hitomi Murakami of KDDI reminded the audience about ignored opportunities, such as the global trend toward aging populations, along with the tech march from our current peer-to-peer interchange morphing toward peer-to-machine and eventually machine-to-machine.

Whatever the future holds, it lies in the East. "The ‘70s belonged to TV, the ‘80s belonged to cable and satellite and the ‘90s belonged to Internet 1.0," commented Daniel Scuka. "But the 2000s and beyond belong to mobile – [with] much of the real innovation in content, business models and delivery happening in China, Japan, Korea and India. Sure, Apple’s iPhone is cool – but so what? The Japanese and Koreans have already had terrific mobile music for half a decade."

This article is credited to
Allison Dollar
CEO of the Interactive Television Alliance and a corporate strategist for the digital media industry.
310.428.5079
allison@itvalliance.org
adollar1@mindspring.com

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