Xellular Identity - All About Mobile Content & Marketing

Frank Dickson of iSuppli: Strong Long Term Growth Lies in the Mobile Full-Track-Downloads

Hi all,

Welcome to the second part of the mobile content coverage.

Today, Frank Dickson from iSuppli will be visiting here. Frank is Principal Analyst, Multimedia Content Services. He covers markets for digital video and home entertainment, with focus areas including IPTV, video on demand, home networking and broadband video.

Hi Frank. How are you today?
Life is good. Thanks for asking.

What has been successful to date and what promises to sell in the future?
In addition to premium content, messaging continues to grow strongly worldwide but with significant regional variation. The mature country markets of Western Europe and Asia saw growth, but the growth in the Americas almost astounding. Growth is strongest among the US operators, several of which saw revenue associated with messaging double in 2006 compared to 2005. Messaging growth is being driven by both increased p2p messaging usage as well as increased premium SMS associated with mobile content purchases and participative TV.

What are the key drivers for market growth for different types of mobile content and entertainment?
The future is all about video! The mobile video market continues to develop, but remains highly fragmented on nearly all fronts. Business models are uncertain. Technology standards are uncertain.  Consumer usage models are uncertain. Content rights need to be resolved. Geographic differences are significant in both content consumption and regulatory environment. As a result, the mobile video market will take time to develop, but offers the biggest potential upside. Competitors across the value chain should participate early to learn and develop a position in the market. Competitors should set expectations appropriately for a highly volatile market with high uncertainty in the short term. Agility will be key to adapt to rapid change.

Many state that widespread consumer demand has lagged after a rapid penetration rate. Why? What are the barriers for market growth of market for mobile content?
The major barrier to growth of mobile content is leakage, as in revenue leakage. Approximately, 5% to 10% of transactions turn out as bad transactions due to fraud, lack of funds on a prepaid card or delivery problems. Another 5% to 15% of good transactions result in refunds due to shady marketing practices, overly protective wireless operators not wanting a customer to have a bad content experience or a lack of transaction visibility for customer service. Wait, did I mention the customer service support call costs? There is money leaking everywhere.

One of the problems is that the wireless operators want to be in the center of the purchase experience.  The billing systems however are built to service reoccurring wireless subscription customers. Wireless operators making themselves the nexus of mobile commerce transactions creates a problem as they are now providing high volume transaction clearing services like those provided by Visa, PayPal and others.  Frankly, processing financial transactions is not at the heart of their distinctive competencies.

How will the services evolve over time?
The mobile music market is among the most dynamic content categories worldwide. Polyphonic ringtones are receding with a transition to realtones. However, on a worldwide basis, the overall ringtone category appears to be slowing. 

Ringback tones continue to gain strength in Asia, but haven't migrated significantly to other geographic regions yet. Video ringtones are among the newest services positioned as a next-generation ringtone.
The emergence of full track download music services continues, with operators worldwide deploying services. Dramatic growth of these services remains mixed regionally and by operator. Consumers are still slow to build awareness, while operators have significant challenges to put together a cohesive and easy-to-use full track music storefront. Overall, in the emerging battle between music phones and mp3/pmp players, the music store and music delivery platform still significantly favors mp3-oriented services. 

What applications will drive the market in the next few years?
We believe that there is strong long term growth in the mobile full-track-download market. However, outside of Asia, the inflection point for dramatic growth is still developing. Overall, iSuppli reduced it’s full track download forecast in this quarters tracker, while increasing our outlook for mobile music streaming services. Full track downloads will continue to be among the strongest mobile content markets, while streaming music services will segment the market somewhat and take advantage the subscription-based business model which aligns ideally with mobile operator business models.

For example, we did end-user primary research to provide more insight into consumer demand.  Approximately two-third so respondents listened to music on they PMP; however, only 10% listened on their phones. This suggests their may be some struggle converting individuals from a usage specific device mentality to unbiquitious device mentality.

A big thanks to Frank Dickson for this great interview! :)

Frank Dickson of iSuppli: Content Will Be the Battelfield

Hi all,

Today, Frank Dickson from iSuppli will be visiting here. Frank is Principal Analyst, Multimedia Content Services. He covers markets for digital video and home entertainment, with focus areas including IPTV, video on demand, home networking and broadband video.

Frank has over a decade of industry and market research experience. In his most recent prior role, he was Senior Director of In-Stat’s Convergence Groups and responsible for the firm’s multimedia and convergence research. His coverage included multimedia services, content, equipment, infrastructure, and residential connectivity, and semiconductors. Frank has a Masters Degree with Distinction from The American Graduate School of International Management and an MBA from Arizona State University. He also holds a Bachelors of Science Cum Laude Degree in Operations/Production Management from Arizona State University.

Getting to Know Frank

Hi Frank. Thank you for visiting Xellular Identity :) How are you?
Life is good. Thanks for asking.

What got you interested in mobile?
Greed. Whoops. Did I cross the line from honesty to transparency?

Wireless subscribers are measured in “B’s” as in billions. hat type of market size means that a whole lot of people have a lot at stake and are willing to buy research. 

What takes up your time other than mobile?
I live in Arizona with 360 days a year of sun shine. Time for me is spent in sporting activities or watching my son play baseball. It is not a life as exciting as 007, but I like it all the same.

The Market of Mobile Content

How big is the market for mobile content and entertainment?
REALLY BIG! Try almost US$20 billion worth of big. Music alone with its multiple usage applications will almost reach US$9 billion.

Which important trends are shaping the mobile content market?

1. Growth in ringtones & Ringtunes is slowing. Asia and Europe are maturing, while heady growth rates in North America moderate. Continued growth in mature markets will migrate to product extensions of ringtones and development of full-track download and streaming music services which will take time to develop. The growth opportunities for digital music across all categories are shifting to the emerging mobile markets: Latin America, Eastern Europe, Middle East, Africa and developing Asia. 
2. Mobile gaming growth is slowing significantly, particularly in Asia. However, North America remains a growth market. Furthermore, game quality is improving with new advanced 3D graphics technology in handsets and multi-player gaming capabilities. The opportunity to expand the market relies on broader awareness for the core segment of casual mobile games, and development of new gaming segments. Developers and operators need to focus on leveraging the unique characteristics of mobile gaming: mobility, connectivity and location.

How significant contributor to the overall revenue is the mobile content expected to be in the future?
How significant? It seems to be the battlefield will be centered on content. The markets for mobile premium content, including music, video and gaming continue to drive operator data revenue.  Messaging continues to be a strong market as well, with dramatic growth in North America. 

Operators are looking to mobile content and other value-added services for 1) Revenue growth and 2) churn reduction. As the operators are the primary mobile distribution channel, content providers, application providers and technology providers need to focus on these two objectives.

Voice ARPU declines accelerated in the quarter for most of our profiled operators. Across the 20 key operators, Q1 2007 aggregate voice ARPU declined 6% sequentially compared to Q4 2006. Voice ARPU declines were mixed among operators on a worldwide basis with some seeing slight increases while others were down. Meanwhile mobile data ARPU increased sequentially by 1%. Overall, most of the global operators saw Data ARPU growth. Data ARPU is particularly strong among North American operators, where both messaging revenue and mobile multimedia content are seeing strong growth.  Across all the operators, nearly 20% of revenue is now associated with data. Three of our tracked operators get over 30% of revenue from data: SK Telecom, NTT Docomo and O2. Aggregate subscriber growth slowed to 3% sequentially in Q1 2007, down from sequential growth of 6% in Q4 2006.

Thank you Frank! :) Don't forget to join us next Sunday for the second part of this interview.

Seamus McAteer of M:Metrics on the Ringback Tones Market (Part III)

Welcome to the third part of the ringback tones coverage. Today, Seamus McAteer will be visiting here. Seamus is a co-founder, chief product architect and senior analyst at M:Metrics. Seamus has covered the wireless industry since the early 1990s and has earned a reputation as one of the most respected and credible analysts in the industry. He held director and research fellow positions in several corporations analyzing internet and communications technology before founding his own wireless and telecommunications advisory services firm. He is frequently sought by the media for expert commentary on wireless, Internet and related technologies.

If you missed the previous two part here are the links: the first part and second part.

Seamus, the stage is yours:

Hi Seamus. Thank you for visiting Xellular Identity :) How are you?
Great, thanks :)

What kind of business models exist today in the ringback tones market?
Pricing for Ringbacks can vary quite considerably. Most operators charge a monthly fee of between 99 cents for Cingular and Verizon and $1.49 for T-Mobile. Sprint charges $2.50 for use of a tone for a 90 day period. Some operators such as Boost charge a monthly subscription fee for use of a song. Again, like the issue with lots of different names, lots of different pricing schemes has got to create some confusion.

Labels like Ringback tones because it yields a nice recurring revenue stream and they get a nice royalty payment as operators will use a label-owned recording by the artist, this is not the case for poly tones for example. As a result labels can expect so share north of 30% of the retail revenue in most major markets.

Do you see correlation between market adoption and churn for ringback tones?
Comparing adoption rates and churn across markets it is evident that as adoption climbs churn falls. For example Spain has the highest level of adoption among the markets with track with about 10% of Spanish mobile subscribers over 13 reportedly using the service and it has the lowest churn rate of about 12% in a month. Italy has the highest churn of over 20% monthly and the lowest rate of adoption after the UK at about 3%.

Any examples of marketing best practices?
Verizon has the highest level of awareness and lowest churn for ringback services in the US. Its packaging of the services has been effective – it uses an introductory notification to tell the caller that their party is being reached. It’s launch was also effective, it worked closely with Warner Music on a mutual campaign.

Anything else to add to this interview?
Nothing, except that it was nice to hang out with you and the Comverse team at your customer event in Miami to talk about theories of social networking and the ringback market!

A big thanks to Seamus for his willingness to put the time and effort to convert his presentation given at the Fun Dial marketing Seminar (April 2007, Miami) into an interview and share with us all. :)

Seamus McAteer of M:Metrics on the Ringback Tones' Market

Welcome to the second part of the ringback tones coverage. Today, Seamus McAteer will be visiting here. Seamus is a co-founder, chief product architect and senior analyst at M:Metrics. Seamus has covered the wireless industry since the early 1990s and has earned a reputation as one of the most respected and credible analysts in the industry. He held director and research fellow positions in several corporations analyzing internet and communications technology before founding his own wireless and telecommunications advisory services firm. He is frequently sought by the media for expert commentary on wireless, Internet and related technologies.

If you missed the first part, just follow this link.

Well, let's welcome Seamus:

Hi Seamus. Thank you for visiting Xellular Identity :) How are you?
Great, thanks :)

What are the market size estimates for ringback tones?
M:Metrics tracks use by end-users not revenues. In terms of overall usage we are talking about a service that was being used by about 9 million or so subscribers in the US in April, which is a doubling over the prior year.

How significant contributors to the overall revenue are the ringback tones to be in the future?
If adoption creeps up to about 20% in five years -- which is feasible --  then we are talking about a market with 50 million users spending about $3.50 per month if we account for increased switching and purchase of new songs etc. as people get more used to the service. Then we are talking about a market worth $2.1 billion just in the US. Not bad but still only 1% of all revenue. Ringbacks will be one component of the mobile music market which will include full tracks, music videos, video tones, and master tones. Music is a strategic priority for operators along with video, games, mobile Web, and advertising.

What are the barriers for market growth of ringback tones?
I think that the big barrier for growth in the market is marketing and education. We are getting beyond the early adopter stage where there is really significant social risk associated with use of ringbacks and people are confused when they hear a ringback and hang up. This is particularly the case among subscribers under 35 years of age. To get beyond the early adopter group there needs to be clearer marketing of the service and simplified pricing. The fact that there is no accepted consumer friendly generic name for the category is a real breather of confusion. The term Ringback is actually used as a brand name by Verizon and other operators have shied from using it.

Who are the major players?
Among operators in the US Verizon and T-Mobile, which launched services towards the end of 2004, have a lead in the market with adoption among their base of about 7%. Verizon leads on a market share basis given its substantially larger base of subscribers. Sprint is next in the market in terms of conversion with about 5% of its base.

The major players among vendors are RealNetworks through its acquisition of WiderThan and Comverse. NMS would be another major vendor in the market.

Thank you Seamus :)
Seamus will be here next Tuesday with more of M:Metrics insights about the American market of ringback tones -- so don't forget tune in!

Seamus McAteer of M:Metrics on the Ringback Tones' Consumer

Hi all,

Today I have the honor to host Mr. Seamus McAteer at Xellular Identity. Seamus is a co-founder, chief product architect and senior analyst at M:Metrics. Seamus McAteer has covered the wireless industry since the early 1990s and has earned a reputation as one of the most respected and credible analysts in the industry. He held director and research fellow positions in several corporations analyzing internet and communications technology before founding his own wireless and telecommunications advisory services firm. He is frequently sought by the media for expert commentary on wireless, Internet and related technologies.

First time our paths crossed was when M:metrics published their report about the ringback tones market titled "Ringing(back) into the year":

According to M:Metrics, the mobile market authority, while ringtone purchasing declined in Europe and leveled out in the U.S. market, a new star was rising: the ringback tone.

The mobile measurement firm found that ringbacks have grown most aggressively in the United States, at a rate of 225 percent from the quarter ended January to the quarter ended November. Ringback subscriptions grew across Europe, at a rate of 150 percent Germany and 146 percent in the U.K. during the same period. Between July and November, ringbacks grew 12.8 percent in France and 11 percent in Spain.

“The rise in ringbacks indicates that personalization remains an important motivation for mobile content purchases,” said Jen Wu, entertainment analyst at M:Metrics. “While we see a decrease in ringtone purchases, we do see an increase in user-created ringtones. Since it’s impossible to hack a ringback tone, this growing market is not threatened by piracy and end-user savvy.”

[via M:metrics]

After reading the report I really wanted to interview Seamus about it; then I was very lucky to actually meet Seamus in person and hear his presentation about the ringback tones market in the USA at the Fun Dial Marketing Seminar. His presentation was very interesting and I really appreciate Seamus' willingness to put the time and effort to convert it into an interview and share with all of my readers.

Getting to Know Seamus

Hi Seamus. Thank you for visiting Xellular Identity :) How are you?
Good… jetlagged after a trip to China, but otherwise all is well.

What brought you to the world of mobile?
I covered the mobile sector as an analyst since the mid-90s when I was with SRI International, a big technology think tank. I wound up picking up coverage of mobile data and handheld computing for a number of syndicated services which were offered by the Business Intelligence Center. I was more of a generalist technology forecaster at the Center before I fell into a specialization in mobile.

What takes up your time other than mobile?
Since I founded M:Metrics in 2004 I have had limited time for a lot of things that I enjoy outside of work. Time with friends and family are a big priority. I love to run trails in the Bay Area, enjoy studying history, and love live Jazz.

Something interesting to share with the world about you?
I have 8 sisters and 2 brothers. We are all close, like an Irish clan, and family gatherings are a lot of fun.

The ringback tones' Consumers

What is offered in this market today?
M:Metrics tracks the market for mobile content and applications in the US and leading markets in Europe. In the US about 10 operators offer ringbacks branded using various monikers such as Calling Tones from Sprint, or Answer Tones from AT&T, and Calling Tunes for T-Mobile. All of these names for the same generic category have got to be confusing for customers.

How users become aware of the ringback tones service?
Ringbacks have built in viral adoption appeal. I think that most people learn about ringbacks when they hear it when they call a friend. Awareness differs significantly by operator which shows that marketing must also have something to do with building awareness.

Who buys ringback tones?
Subscription to ringback services is gender neutral almost 50:50 male to female adoption in the US. Consumption skews young with a median age of about 28 but it is older compared with ringtone purchase, which has a median age of under 27, or listening to music loaded over the air which has a median age of close to 24. African Americans are more than 2.5 times more likely than the market average to subscribe to ringback tones.

Thank you Seamus :)
Seamus will be here next Tuesday with more of M:Metrics insights about the American market of ringback tones -- so don't forget tune in!

Special: A Sneak Peak at the mobileYouth report 2007 (Part II)

Hi everyone,

Continuing with a great success, let me welcome here again a dear friend of mine. Please welcome Savka Andic, Research Associate at the Wireless World Forum, who is also the co-author of the mobileYouth 2006 report. Savka has agreed to share some insights from the upcoming mobileYouth 2007 report! If you missed the first part of this interview, just follow the link.

Savka, the stage is yours!

Which handsets are popular among different age groups and why?
There is a whole school of “handset anthropology” devoted to the study of how mobile handsets mark out group identity. Handsets are not only associated with different age groups but also with different lifestyles and aspirations. One recent Australian survey I came across drew the following conclusions about the identity of handset owners:

Handset	Typical Owner
Motorola	Fashion-conscious under 24s
Nokia	Family-minded, middle-aged managers
Sony Ericsson	Ambitious young men trying to make their mark
Samsung	Career-minded young women
LG	Mothers

According to this survey, I would be an ambitious young man, given that I’m the proud owner of a Sony Ericsson Walkman handset -  It’s a great handset and I would recommend it to music lovers everywhere (Sony Ericsson are not sponsoring me to say this!).

Notice that Motorola is very much seen as a youth handset, particularly in the United States. This is due largely to the success of the slim and zippy Motorola V3 RAZR handset. The handset’s status as a badge of inclusion among youth made it into an iconic youth handset. Nokia, as always, is renowned for its durability and reliability, and for this reason is favoured by more active youth with a propensity for breaking things!

Which services appeal most to different age groups and why?
Pre-teens and younger teens will favour services which allow them maximum communication with their friends. Services such as Boost Mobile’s Loopt service are popular with this age group. Boost Mobile customers can download Boost Loopt on its existing Java- and GPS-enable handsets. Once you activate the service, Boost Loopt can use GPS to locate you and others who subscribe to the service and have accepted your Boost Loopt invitation to list them as friends. When Boost Loopt is running, a map appears on screen showing your own location. Up and down hardware navigation controls on your handset cycle through your friends' locations, from nearest to farthest or from farthest to nearest. Left and right navigation buttons control the zoom view of the map.

Like some instant messaging clients, Boost Loopt lets you scribble a short status message about what you're doing; you can also broadcast messages to groups of friends (which you can define by name, using a desktop browser) or to all friends within a certain distance. Boost Loopt lets you bookmark locations and define events to which you can then invite your friends. The service expects to introduce additional community mapping features--such as the ability to tag, blog about, and annotate locations with images and videos--later on.

Older teens and young adults will favour services such as Chaos Mobile, a portal for mobile music and content based on punk and rock music, skateboarding and other extreme sports associated with the “Vans Warped” tour. On Chaos Mobile, consumers can download songs, related content such as ringtones and wallpapers and find additional music and artist information exclusive to the portal. This age group also favours MVNOs such as Amp’d Mobile, which creates and delivers exclusive mobile content to its subscribers (such as the Li’l Bush series). These kinds of services are more geared to a youth expression of individuality and desire for unique content than simply to satisfy a need for belonging.

What can you say about issues like texting and linguistic degradation?
The results are inconclusive. While some studies have shown that youth linguistic skills are adversely affected by text messaging and we hear that “txt spk” is showing up with disturbing frequency in school essays and exams, other studies have shown that the children who text most frequently are on average stronger readers and writers than the less frequent texters. So texting doesn’t have a noticeable effect on the language used by children with pre-existing stronger literary skills. What still needs further investigation is whether children with weaker literary skills are more adversely affected by texting.

Thank you Savka for this great interview :)

Special: A Sneak Peak at the mobileYouth report 2007

Hi everyone,

Continuing with a great success, let me welcome here again a dear friend of mine. Please welcome Savka Andic, Research Associate at the Wireless World Forum, who is also the co-author of the mobileYouth 2006 report. Savka has agreed to share some insights from the upcoming mobileYouth 2007 report!

Savka, the stage is yours!

What can you say about the differences in mobile usage among youth worldwide?
Differences in mobile usage among youth worldwide are due more to differences in mobile industry structure than they are to any underlying cultural differences between today’s youth. In fact, youth are remarkably similar and share the same basic needs the world over; what’s different is how the mobile industry recognizes and responds to these needs. We often hear arguments about how Japanese and Korean youth are more “gadget-crazy” and more likely to be early adopters than American or European youth, or how the culture is simply different in East Asia and youth there are naturally drawn to strange new technologies. This is like arguing that people living in the tropics spend more time outdoors than those living in snowy climates because they are innately drawn to nature, completely ignoring the fact that it’s much warmer near the equator and therefore more pleasant to spend time outside than in the freezing cold! It’s flawed logic which overlooks the generative conditions of youth mobile use.

For example, people used to argue that texting would never take off in the US like it did in Europe or Asia because more people had access to email and wouldn’t be interested in using the phone for sending messages. However, in 2006 texting grew fivefold in the US and is now nearly on a par with texting in Europe after the dismantling of major industry-related barriers such as SMS interoperability and charging models where customers paid to receive text messages.

Youth in Northeast Asia continue to lead the world in high levels of data usage, where on average youth data ARPU comprises 40% of total ARPU. In Europe, America and the Middle East data ARPU still lags significantly behind, comprising about 10-20% of total ARPU. I predict a move towards significantly heavier data use among youth in the coming few years, particularly with the increasing uptake of mobile music.

Where are the emerging youth markets for mobile products and services?
Geographically speaking, China, India and Brazil will continue to be key markets for the next five years, all three of them ripe for growth. In the more mature markets, mobile content is still very much an emerging market for youth with a lot of potential. Operators and content providers are not yet finding the best ways to satisfy youth desire for mobile content, with the notable exceptions of youth MVNOs such as Amp’d Mobile in the US and the East Asian operators. Amp’d Mobile’s success shows the considerable appetite which youth have for mobile content: an ARPU four times higher than the US/European average and content revenues nearly ten times higher than the US/European average.

What are the economic implications of mobileYouth purchasing?
Displacement, displacement, displacement! Mobile’s intrusion into the traditional areas of youth consumption has created displacement in both the financial and the social arenas. The more conventional youth symbols of social status and maturity, such as cigarettes and special clothing, have been displaced to a considerable degree by mobile. In fact, the decline in smoking among UK 15-16 year olds during the late 1990s and early 2000s was attributed in part to the rise of the mobile phone, which not only left youth with less disposable income to spend on cigarettes but also functioned as a tool to define status and signify maturity much in the manner of the cigarette.

Financially speaking, mobile has displaced a remarkable $500 billion worth of youth spending since 1996. In 2006 alone, youth worldwide spent $130 billion of their disposable income on mobile, and by 2010 that figure will rise to $350 billion. Today youth on average spend 10% of their disposable income on mobile, but in certain regions such as Japan, Korea and the Middle East, that figure is as high as 15-20%.

You claim there is a lack of consumer focus in mobile industry. What are the reasons for it?
We identify two basic reasons for this lack: the residual effect of uncompetitive market conditions in early markets and the general attitude of the technology industry towards consumers. Decades ago, the divide between technology and the average consumer was very great. Technology did not make up the fabric of everyday life like it does today and average people had less knowledge and lower expectations of technological products. In turn, the industry did not feel obliged to take consumer needs into account and this fostered an industry push model of technology. The industry assumed that consumers (or “end users” as it still calls them) would eagerly lap up all of the products pushed upon them, a mentality which continues today with concept such as “killer apps” and the like.

Telephony was traditionally seen as a utility, much like gas and water. Gas, water and landlines are commodities, and you really don’t care who provides them for you as long as it’s reasonably cheap and good quality. This telephony-as-utility approach had a residual effect on the mobile industry. However, mobile networks cannot behave towards consumers as if they are providing a mass-produced generic utility - mobile phones are crucial social tools and people are anything but indifferent to them like towards gas or water.

What are the “mobile myths” according to mobileYouth?
The lack of consumer focus in the mobile industry addressed above has spawned a series of myths regarding how consumers use their phones and what they want on mobile. One of the main myths which I touched on above is that consumers want “killer apps” – fun and “cool” new technologies and “feature-rich” phones. The principal message of mobile youth is that “killer apps” and “features” mean nothing unless they are underpinned by a social benefit for the consumer, especially for young consumers, whose universe is tightly defined by the type of social interaction they have. This is why complicated services with no clear social benefit such as MMS have not taken off, despite the industry pitch. Why should kids send expensive and convoluted MMS when they can upload their mobile photos to Flickr using services like Shozu and share them with friends?
This is where Comverse has done a great job with mobile avatars. Mobile avatars recognize youth’s need to extend their self-expression beyond their phone, making the avatar a form of social currency among youth.

Another myth is the myth of mobility – the idea that simply being able to take something with you on your phone is a social benefit. Mobilizing existing services such as TV and social networks is not necessarily compelling for youth – there must be some added benefit beyond mobility which reinforces youth’s existing peer group or helps them interact more effectively with their environment. It is for this reason that PC and mobile social networks are actually quite different, and simply sticking a PC MySpace page on mobile phones is not really compelling or a big deal for youth. This is also why technologies like QR codes can be very beneficial, because the leverage the unique flexibility of the mobile phone to the consumer’s benefit.

Kids use their mobile phones a lot at home where they can easily access PC and landlines, so obviously the appeal of the mobile phone goes deeper than just “mobility” otherwise they would only use their phones when “on the go”

Thank you Savka for these great insights :)
Savka will be here next Thursday, so don't forget tune in! 

John White: Mobile Messaging Futures (Part IV)

Welcome to the third part of the mobile messaging coverage. Today, John White of Portio Research Ltd will be visiting here. If you missed the previous parts you can follow these links: Part I, Part II and Part III.

Let's welcome John:
Hi John. Thank you for coming back, how are you? :)
Hi Xen, thanks a lot, I’m doing great thanks.
Today, you're going to share some more insights about the mobile messaging futures
Yes! Here’s what Portio Research has to say about it:

Why has growth been so slow for mobile email?

Once we understand this argument, we can put mobile email into perspective. Set against an installed base of 2 billion plus SMS-capable handsets, mobile email has only just got off the starting blocks. RIM’s BlackBerry is widely accepted as the market leading device of choice for corporate executives who need reliable mobile email, yet after years of pushing these excellent devices into the market, the installed base of BlackBerry subscribers, worldwide, in mid-2006, reached only a little over 6 million. Taken alone, 6 million or more is a great success for RIM, but compared to the 2 billion souls around the world with SMS in the palm of their hands, it’s just a drop in the ocean.

Looking forward perhaps 10 or 15 years, we should see a future where email becomes the unchallenged #1 most popular form of non-verbal communication on the planet. With billions of people connected to the Internet, wired and wireless, email will surely be the messaging format that most people use, but this is unlikely to be a conscious decision on the part of the consumer. By this time, how an individual is connected to the Internet, and which messaging platform they are using won’t matter - and the user will neither know nor care how it all works. Messages - text or images, moving or still, with or without attachments, sound, colour, etc - will be sent and received by any device, any time, any place, with or without wires, and telecommunications service providers, if they are smart, will not burden consumers by even trying to explain how it all works.

But getting us to that vision of the future from where we are now will take some time, and there will doubtless be some barriers to cross along the way. To move towards a point where mobile email becomes the mass market messaging format of choice will require absolutely seamless integration of competing technological standards, in an industry that so far has a poor track record on standardisation. For mobile email to start reaching deep into the mass market we need widespread penetration of email-enabled devices, we need to see simple, transparent pricing and we clearly need effortless interoperability between telecoms operators, not only mobile network operators but also wireline operators and the broader Internet community as a whole.

So it may be a while before consumers all use mobile email, but what about the enterprise sector?

In the short term, mobile email solutions such as BlackBerry will remain popular tools with company executives, and many operators around the world are promoting their own email solutions, and this should slowly help the sector to grow. But as we learned from MMS, it takes a long time for handset penetration to build a critical mass of users, and a long time for a service to penetrate the consumer masses who are more price-sensitive than corporate users.

Further hampering the take up of mobile email in the enterprise environment, corporate IT departments are unclear about how to integrate mobility in the broader world of the corporate IT infrastructure. Should mobility be bought with other IT and telecom services from long standing, trusted suppliers, or separately, directly from the network? Should corporations equip large sections of the workforce with mobile devices, possibly costing a hefty slice of the IT budget, or can companies tap into the devices these individuals already own? If using their own devices, who should pay the bill and how does the corporation control network security? Corporations are understandably concerned about making these decisions, and so far no clear precedent has been set.

Again this presents an opportunity for SMS, and a problem for mobile email. While big companies can afford complete mobility solutions, for many small and medium sized enterprises that simply is not an option. In mature markets such as Europe and North America, the vast majority of employees already have an SMS-enabled device in their pockets. Solutions are available to offer some email functionality to SMS, such as copy, back-up, archive, forward, auto-divert, out-of-office reply and so on. If enterprises could buy into these solutions from network operators at a fraction of the cost of replacing all those handsets, many SMEs might find that SMS has an affordable place in the corporate communications infrastructure, at least for a few years while the industry hammers out the technical barriers to cheap, widespread mobile email for all.

So mobile email has a strong future, but it would be a mistake to expect it to replace SMS for many years yet, probably the best part of a decade. Mobile email will continue to grow year-on-year and big corporations will start deploying large scale mobile email solutions as time goes by, but mobile email for the consumer mass market remains some years away. Hundreds of millions of email-enabled devices need to penetrate the market first, alongside cheap and easy-to-use services, and technical issues around standardisation need to be ironed out before they have a chance to put people off. Remember ‘you never get a second chance to make a good first impression’. 

And where does that leave mobile IM?

Yet again we find it’s pretty much the same story for mobile IM, plus or minus a few subtle differences. Again mobile IM requires market maturity to make a big impression on the messaging industry globally. Hundreds of millions of IM-enabled handsets need to penetrate the market, interoperability agreements need to be in place and operators need to work together to ensure standardisation and the removal of technical barriers. Much of the promise around mobile IM lies in the argument that hundreds of millions of individuals already use IM services on their PCs, and these people are likely to switch effortlessly to using IM on their mobile handsets instead.

While this may eventually happen, this theory relies on a number of factors. For one, maybe these people use IM on their PCs because they sit in front of a PC all day anyway, so that’s unlikely to change. Secondly, IM on the mobile handset needs to be a perfect replica of the desktop experience, or better, in order to attract users away from a cheap wireline broadband connection to a more expensive wireless connection. Facilitating this experience will mean network operators, handset vendors and IM heavyweights such as AOL, Yahoo and MSN working closely together to ensure standardisation of handset display configuration and so on. Finally, true IM requires presence awareness in order to function as it does in the desktop environment. For operators worldwide to deploy fully IMPS (Instant Messaging and Presence Services) compliant IM services and have those service fully interoperable around the globe will take some time, and until that happens, without presence awareness, IM offers little more utility to end users than good old SMS, which everyone already has and already knows how to use.

As markets move forwards mobile IM is likely to gain increasing popularity in certain countries, such as the US and some big Asian nations, where desktop IM is already popular. For hardcore users IM is likely to be cheaper than SMS, but in strong SMS markets, such as Europe, operators will keep SMS prices low and IM prices less competitive. Cannibalisation will inevitably happen at some stage, once all-IP based networks penetrate the mass market and IMPS improves the functionality of IM, but until then SMS is likely to continue to wear the crown.

Thank you John for this interview, it was VERY insightful! :)

Tune in next Sunday for the my next visitor!

John White: Mobile Messaging Futures

Welcome to the third part of the mobile messaging coverage. Today, John White of Portio Research Ltd will be visiting here. If you missed the previous parts you can follow these links: Part I and  Part II.

Let's welcome John:

Hi John. Thank you for coming back, how are you? :)
Hi Xen, thanks a lot, I’m doing great thanks.

Today, you're going to share some insights about the mobile messaging futures
Yes! Here’s what Portio Research has to say about it:

Many in the mobile industry feel that MMS, mobile email and mobile IM have somehow failed as messaging platforms and that SMS, though it seems to pain people to admit it, is the only truly successful mass market messaging format. However, this is not the case, while SMS is a truly staggering mass market phenomenon, these other messaging formats have not failed, they have simply failed to match up to the runaway success of SMS.

For some reason SMS has become a ‘dirty word’ for some people, analysts don’t like to talk about it, mobile operators don’t like to focus on it, and no-one treats SMS like it’s sexy any more. It’s as though SMS is “old” technology, as if it no longer deserves any credit, it should be consigned to the history books. This is crazy. Worldwide, SMS still accounts for approximately 75 to 80% of all non-voice service revenues, SMS traffic volumes are still growing at a breath taking pace and as worldwide subscriber numbers climb from 2.5 Bn to 4.5 Bn over the next 5 or 6 years, SMS is the only non-voice service likely to gain widespread acceptance among the majority of these new mobile users.

Worldwide, SMS traffic hit 1 trillion messages in 2005, and that figure is set to reach over 3 trillion by the end of 2011. Set against that backdrop, of course other messaging formats look small. But MMS has not failed; worldwide MMS traffic touched 14 billion messages in 2005 and is forecast to pass 115 billion by the end of 2011. These are not small numbers, and while they are only a fraction of the volume that SMS has achieved, MMS should still be seen as a great success.

So if MMS is a success, why has it not replaced SMS?

MMS has not failed; the industry had totally unrealistic expectations of MMS in the first place. MMS was hyped as the natural replacement for SMS, but that shows a misunderstanding of SMS and the reasons why SMS has been such a big hit worldwide. SMS owes its success to its simplicity. It is the quickest, easiest and cheapest way for two people to communicate a short and simple message and as such it serves as an extremely useful communications option that is affordable universally, even among some of the lowest income groups of society.

MMS, on the other hand, has been misunderstood from the start. MMS should be seen more as a mobile entertainment service than as a messaging service. MMS is more complex and expensive than SMS, so consumers are unlikely to use MMS to communicate a simple message, when SMS does the job so quickly and easily and costs so little. MMS will always look like a failure when compared alongside SMS, yet when you consider MMS in its own right, as an entertainment application and content delivery tool, then MMS can be seen as a very popular and successful service.

Why has growth been so slow?

MMS struggled to gain ground between 2002 and 2004 primarily because the service was not fully supported and the necessary equipment was not in widespread circulation. At the time of launch, MMS-enabled handsets, with GPRS support, colour screen and camera included, were comparatively expensive, and many networks launched services amid an array of complex tariffs. MMS was often charged according to the size of the message (per-KB) which left end-users confused about costs and created the perception that picture messaging was expensive.

Further problems were caused by a lack of standardisation among handset vendors, leaving screen display for MMS messages unreliable, and a lack of signed interoperability agreements between network operators further hampered the potential growth of MMS services. Add all this together and throw in a complex user interface and it is hardly surprising MMS got off to such a slow start. The industry failed to understand that until the penetration level of MMS-capable handsets reached a certain critical mass, widespread use of the service was never going to happen.

Only now is MMS growing in popularity since all networks are fully interoperable, colour-screen cameraphones are in widespread circulation and MMS tariffs are now cheap and transparent. Compare this to SMS: worldwide there are approximately 2 BILLION SMS enabled handsets in operation, it’s cheap and easy to use, widely supported in almost every corner of the mobile world and there are hundreds, perhaps thousands, of services and applications that utilise SMS as a communication medium. That is why SMS is so popular, and why MMS has taken so long to take off.

Thank you John for this interview. Wanna read more about mobile email and mobile IM?? Tune in next Sunday! :)

John White on MMS (Part II)

Welcome to the second part of the mobile messaging coverage. Today, John White of Portio Research Ltd will be visiting here and covering the MMS. If you missed the previous part you can follow the link.

Well John, the stage is all yours! :)

What is the value of MMS?
MMS generated approximately $15 Bn USD in full-year 2006, and our new “Mobile Messaging Futures 2007-2012” forecasts this rising to almost $34 Bn USD by the end of 2012.
Market size estimates Worldwide, MMS traffic volumes in 2006 reached a little over 27 Bn messages, which demonstrates remarkable growth of over 90% form the year before…when we recorded total SMS traffic at 14 bn messages worldwide for the full-year 2005.

How big is the market for MMS?
We forecast this market to continue growing healthily for several years to come, contrary to some reports than “MMS is all-but-dead”, we disagree and we see MS traffic volumes growing to reach over 131 Bn messages worldwide by the end of 2012.

When will MMS penetrate the mass consumer market?
We believe that the entire mobile industry has misunderstood MMS from the start, including most of the operators who have been working hard to drive higher adoption. MMS was sold from the start as this great successor to SMS, but that shows a complete misunderstanding of what MMS ad what has made SMS such a popular service. As explained previously, SMS owes its success to it’s utility and simplicity, it is useful, cheap, easy, quick and almost effortless. MMS is entirely different, it offers little additional utility over SMS, costs several times as much and is more time consuming and complicated to use. If anything, that makes MMS LESS useful than SMS, as a service, so why would consumers want to pay MORE to use it? We believe MMS should be seen in its own right as an entertainment service and as a premium content delivery mechanism, not as a messaging tool. SMS is all the messaging many people need, and what MMS offers is something else, something fun, the chance to send pictures to your friends…this is nice, but it is rarely an essential activity, the way many SMS messages are. As long as everyone keeps expecting MMS to follow the success of SMS, they will continue to be disappointed, but once the mobile community stops linking the two together and looks as MMS as a separate service, we can that it is a highly successful application.   

What should operators do to overcome barriers to users’ adoption?
Reduce prices, drastically. SMS is priced, in “most” markets at a price level that most people don’t have to think about. Most people just keep sending SMS messages without thinking about the cost. Once MMS can be priced at a level that people can exchange several picture messages per day without giving the cost a thought, then traffic will grow, rapidly.

Thank you John for this interview. Don't forget to tune in next Sunday for some more talkin' about mobile messaging  :)

John White on Mobile Messaging

I'm happy to welcome John White from Portio Research Ltd to review the market of mobile messaging here.

John White is Business Development Director for Portio Research and has over 17 years experience in the technical publishing industry. Working in the IT sector previously and in the telecoms industry for the last 9 or 10 years, John has extensive experience in the mobile sector.

Hi John. Thank you for visiting Xellular Identity :) How are you?
Hi Xen, thanks a lot, I’m doing great thanks :)

How big is the market for mobile messaging? What are the forecasts for the mobile messaging market?
Mobile messaging is massive, the total mobile messaging market today is worth approximately $80 Bn USD and in 2007 we will see well over 2.2 trillion messages sent back and forth worldwide between mobile devices. SMS is by far the biggest player in this space, with worldwide SMS traffic volumes exceeding 1,662 billion messages in full-year 2006, generating revenues in excess of $47 Bn USD.

As if these figures are not impressive enough, we see SMS growing for some years to reach staggering worldwide traffic volumes of more than 3.7 trillion in 2012, generating a whopping $67 Bn USD in total revenues.

What are the key country markets?
The Philippines have long been regarded as the “SMS capital of the world” and this still holds true, in fact more than ever as recent changes to SMS pricing on the islands has seen traffic roaring through the roof. Elsewhere in Asia Singapore, Malaysia, Australia and China are all hot SMS markets, and of course China takes the crown as the worlds biggest SMS market due to the sheer size of the market overall. The USA is a very hot SMS market and still growing, and in Europe Denmark, the UK and Spain are all aggressive SMS markets. In Latin America, Venezuela enjoys very high usage levels and Mexico and Argentina are strong markets too.

Who are the leading operators in this market?
In the Philippines – all of them! Elsewhere, Maxis in Malaysia stand out, Telecom Personal in Argentina, O2 in Ireland and the UK and Netcom in Norway all enjoy way-above-average traffic volumes when measures on a per-subscriber-per-month basis.

How do you explain the dominant position of SMS as the worlds leading messaging technology?
It’s simple, it’s all about utility, price and simplicity. We have been saying this and printing this in our reports for some time now – SMS is useful, it serves a purpose, it can communicate a simple message from A to B quickly and efficiently at times when a voice call is not so convenient. SMS is easy, cheap, quick and many people think sending an SMS is fun. It is discreet, private, effortless and only takes a few seconds. There is no “downside” to SMS, it serves a purpose, it does the job well and it is quick, cheap and easy – what’s not to like?

How significant contributor to the overall revenue is the mobile messaging expected to be in the future?
We have not specifically forecast ‘messaging-as-a-percentage-of-ARPU’ going forward so I can’t give you exact numbers, but I firmly believe messaging will continue to be the biggest contributor to non-voice service revenues for some years to come. Currently, worldwide, voice accounts for approximately 80% of total mobile service revenues across the globe and messaging accounts for approximately 80% of all non-voice service revenues contributing to that total. AS other services grow then messaging’s dominant position will decline, but we only imagine that happening at a rate of 1 or 2 percentage points per year for the next few years, then perhaps faster once 3G becomes ubiquitous in the mass market.

What promises to sell in the future?
Mobile email, in the long term, but that’s still a good few years away for consumer mass markets.

John White will be here next Sunday for more talkin' about mobile messaging. Thank you John and see you next week! :)

Interviewing John White on Digital Music (Part IV)

Welcome to the fourth part of the digital music coverage. Today, John White of Portio Research Ltd will be visiting here. If you missed the previous parts you can follow these links: Part I, Part II, Part III.

Let's welcome John:

Hi John. Thank you for coming back, how are you? :)
Hi Xen, thanks a lot, I’m doing great thanks.

Today you’ll present the second part of iPhone…
Yes! Here’s what Portio Research has to say about it:

Top spec = top price

Many analysts and industry observers have suggested that the price tag Apple has set for iPhone is too high. We don’t agree with this, we think the prices set, USD $499 (for 4GB) and USD $599 (for 8GB version) are perfectly acceptably to the kind of consumers likely to be interested in such a top-spec handset such as the iPhone. As Jobs pointed out, the $499 price is approximately equivalent to the cost of purchasing an iPod and one of the current market leading smartphones, and we believe consumers will understand this value proposition. More importantly, Apple is only looking for 1% market share, and those 1% of consumers are likely to be in the very top tier of buyers – the kind of people who want a top spec handset and a top spec iPod are the kind of people who are not put off by a high price tag, they have the cash and they want the latest cool device, and we believe Apple will easily find 10 million such consumers in 2008.

Also, during that keynote address Jobs alluded several times to ‘the future’, to ‘more products’, to ‘changing the mobile phone industry’ and so on. Clearly Apple have plans to roll out a whole range of devices over the next few years, and just like the iPod this range is likely to include both high-end and mid-range devices, to broaden appeal to a greater selection of consumers. Two years from now we could expect to see a super-high-end 3G iPhone, perhaps boasting a 5 mega-pixel camera and a massive 60GB of storage and in-built VoIP capabilities.

Equally, at the other end of the spectrum the range may include an entry-level product with a slightly limited range of features priced lower, perhaps at only a couple of hundred Dollars. While even this lowest priced model will remain a premium product over many competitors, this is congruent with Apple’s brand strength and market positioning.

Market impact

As the months now pass after Jobs’ presentation on Jan 9th, the end-user is unlikely to notice any significant changes in the mobile handset market before 2009. Few of these devices will actually make it into consumer’s hands in 2007, at least few outside the domestic US market, and even when Apple achieves its target 1% market share – which we think it will easily achieve – still 99 out of every 100 consumers will not see any changes to the handsets they are using. However, the real significance of the iPhone will show through in the handsets made and shipped by other manufacturers, mostly those who DO ship hundreds of millions of handsets each year.

iPhone sets new standards and new consumer expectations of what a mobile lifestyle device can and should do, and while Apple defends its patents, other manufacturers will find new ways to deliver better devices with better user interfaces to the mass market. We await the 2008 handset ranges from Nokia, Motorola, Samsung and SonyEricsson with great anticipation. The challenge is there to be met, and if these huge players in the handset industry meet it, that can only be good news for everyone, especially consumers.

Thank you John!

This ends up this coverage of the Digital Music market in 4 parts, brought by John White of Portio Research Ltd. Tune in next Thursday for my next series! :)

Interviewing John White on Digital Music (Part III)

Welcome to the third part of the digital music coverage. Today, John White of Portio Research Ltd will be visiting here. If you missed the previous parts you can follow these links:

Interviewing John White on Digital Music (Part I)

Interviewing John White on Digital Music (Part II)

Let's welcome John:

Hi John. Thank you for coming back, how are you? :)
Hi Xen, thanks a lot, I’m doing great thanks.

Today you’ll be covering the iPhone…
Yes! Here’s what Portio Research has to say about the iPhone:

The day after we published our ‘Digital Music Futures 2007-2011’ report, Steve Jobs of Apple Inc. announced the impending release of the new iPhone. What impact will iPhone have on the mobile music market?

It would be hard for anyone to deny that once again Apple have produced a stunningly desirable looking device. The iPhone that Steve Jobs unveiled on Tuesday 9th January, during his keynote presentation at the MacWorld Expo in San Francisco, looks cool, sexy, fun, easy to use and extremely powerful. Apple has surely set a new benchmark for the user interface. What does this mean for the mobile industry and who will see iPhone as a threat, and who will see it as a reason to celebrate?

Good news all round

The answer is that most players in the mobile industry should find this announcement a good reason to celebrate, as this is generally good news for most players and good news for the industry as a whole. We have argued for years that the user interface on most mobile handsets needs to be easier to use to encourage greater use of non-voice services, and while Jobs stated that Apple have filed many patents with this product, which they intend to defend, a standard has clearly been defined and other manufacturers must now step up and meet the challenge.

The iPhone certainly does not represent a major threat to the dominant position of the leading handset vendors. Apple has set a target of achieving 1% market share in 2008, that’s sales of 10 million iPhones in a market of 1 billion handset sales. Considering the high-profile announcement and the months of rumour and speculation that preceded it, a target of 1% after 18 months in the market seems quite low, but that simply emphasises that the iPhone is not targeted as a mass market device.

One of the defining factors that separates Apple products from the rest of the market is the innovative design and the uber-cool image that consumers attached to many of Apple’s products. If this chic, leading-edge image was lost then a lot of the appeal of Apple, and the premium price fans pay, would be lost, so it is actually not in Apple’s interests to become a mass market manufacturer with double digit market share. Just take a look at what happened to the Motorola RAZR. When it was first released it was expensive, chic, desirable and very up-market, yet within 2 years the device is so widely distributed that it is now considered “old news” and it has lost all its cutting edge fashion appeal. That simply is not a space Apple wants to occupy.

Finding a place in the market

In the broader mobile handset industry, Nokia will ship well over 300 million handsets in 2007 and 2008, Motorola should ship well over 200 million, Samsung over 100 million and SonyEricsson should also be aiming to reach close to 100 million. Compared to these, Apple’s target of 10 million should not be cause for any great concern. Where Apple will be causing major worries is in the high end smartphone and PDA market. Manufacturers such as Palm, RIM, Dell, HP and i-mate have every reason to be concerned, and devices such as the Motorola Q, the Samsung Blackjack and the Blackberry range from RIM now face serious competition from the iPhone.

Apple has a number of challenges ahead, not least the lawsuit launched on January 10th by Cisco for infringement of its copyright name, iPhone. Beyond that legal dispute, Apple needs to ensure it has sorted out hardware issues that have plagued iPod. While most consumers can suffer having no portable music player for a few days or even a week or two, while there iPod is being repaired, such breakdowns are totally unacceptable with a $500 Dollar smartphone. The kinds of consumers who pay top-Dollar for a fully featured smartphone don’t like to be parted from their device for an hour, let alone a week. Hopefully such hardware issues will not be a problem. Apple computers have always met high standards of quality and reliability, and as a niche product hopefully the iPhone will also be built to industry leading standards.

OK Xen, I'll tell you more about the iPhone next Thursday, so stay tuned!

Thank you John!

Interviewing John White on Digital Music (Part II)

Welcome to the second part of the digital music coverage. Today, John White of Portio Research Ltd will be visiting here.  If you missed the first part you can follow the link.

Let's welcome John:

Hi John. Thank you for coming back, how are you? :)
Hi Xen, thanks a lot, I’m doing great thanks.

Who are the big players in the global music market? Are there new players in the neighborhood at the era of digital music?
Obviously the music industry is dominated by the big 4 record companies - Universal, SonyBMG, Warner and EMI. Much of the decline over recent years has been attributed to the rise of digital music and the increase in unlicensed file sharing (first Napster, then LimeWire and so on) and illegal peer-to-peer file sharing. It goes without saying now that the music industry looks at developments online very seriously. With the rise of YouTube and MySpace and similar sites becoming major players in the marketing of music, and with increasing numbers of mp3 download sites available, some online players stand to become very influential in the music market. If MNOs get it right and build market share in the download market they too stand to become quite significant in the music market.    

What is the future of retail music sales in comparison to the mobile music?
We forecast physical CD sales to continue declining and digital sales to grow steadily.

What are the estimates for music handsets market?
Without giving away too many of the details from our new study, we forecast a very strong future for the sales of mp3 enabled mobile handsets. We estimate that there will be over 1.7 billion mp3 enabled handsets in circulation by 2011, representing a little over 40% of handsets in use worldwide at that time.

Will the mobile kill the stand-alone MP3 players?
Not exactly, no. We believe that the mobile handset will become the primary portable music device for the mass market, but as the whole digital music market grows, so sales of stand alone mp3 players will continue to grow also – so it’s good news for everyone! There will also remain to be a hard core of dedicated music fans who will carry both, as the stand alone players will maintain a lead over mobile handsets in terms of playback quality, storage capacity and so on.

What can you say about the importance of music to the mobile telecoms industry and the impact of digital music on 3G services?
If the services are structured right and priced appropriately, we believe that digital music has the potential to become a fairly substantial ARPU booster for operators. Music will never generate the kind of revenues that SMS makes, but as a value added non-voice service music could become a great revenue booster for operators.

Any examples of marketing best practices in the music/mobile music industry?
Yes, but we’ve written another entire report about that, called ‘Strategies for Creating End-User Demand for Mobile Data Services’, so readers will have to check that out on our site for more details!

What can you say about the positioning of major players and advertising opportunities in the digital music market?
We see substantial opportunities for major brand advertisers to use mobile music as a way to move more advertising spend onto the mobile platform. We believe there are great opportunities to sponsor or subsidize downloads and we think youth-focused brands could make a real impact here.

What are the key drivers for mobile music appeal?
The appeal of music is widespread. To be fair, as with most other services on the mobile platform, the youth segment will surely lead the market as the early adopters, but it would be foolish and short-sighted to think the market starts and ends there. Music is widely enjoyed by all ages from 9 months to 90 years old, so mobile music services should be designed to appeal to all age groups and demographics. Services need to be easy-to-use, cheap, quick and reliable, and the spread of content on offer must appeal to all tastes. Driving the uptake of OTA services will need innovative marketing, which may be where the advertisers come into play, and mobility will need to be positioned as complimentary, not competitive to wireline services. If consumers can believe there is little difference in price between downloading OTA or on the PC at home, they will download OTA whenever they feel like it.

Do culture and orientation influence mobile music consumption? How?
Sure, in all the obvious ways that culture influences taste in music.

Which are the most developed mobile music markets?
Japan, South Korea, the UK, the USA is fast coming on.

What is going to be the next *big thing* in the mobile music market?
Seeing if the price is right!

Also, I just thought about it, do you want to say something about the new iPhone?
OK Xen, I'll tell you what I have to say about the iPhone - but you'll have to tune in next Thursday for it!

Thank you John!