In May, Bytemobile sat down with Ronan de Renesse of Screen Digest to discuss the state of mobile media. This week, Ronan has been kind enough to answer some questions for our readers.

1) Screen Digest recently published a report on the state of the 3G mobile broadband market. Where do you see 3G mobile broadband fitting into the overall mobile ecosystem today, and where do you see it in three years? How does this affect what carriers are doing, aren’t doing or should be doing?
Mobile broadband today is worth more than mobile TV, mobile video, mobile music, and mobile games combined. The number of mobile broadband connections has multiplied by 10 between 2006 and 2008 and is still rising. Five years after the launch of 3G, mobile operators have finally found a way to monetize their 3G licenses. However, the real potential for mobile broadband is as a primary home connection, and today’s services work well only as a secondary broadband connection. As a result, growth is likely to decline over the next couple of years until mobile broadband can become truly competitive with fixed broadband.

2) You frequently cover mobile video and mobile TV. How would you assess the current state of the mobile video and mobile TV industries? What is the key driver that will increase adoption (network solutions, handset advancements, content)?
Mobile TV/Video is the mobile content category that has suffered the most from the economic downturn. In 2008, we experienced drastic changes in business models with the emergence of mobile content bundles such as SFR Illymitics in France and disruptive technologies such Telegent Systems’ analog mobile TV chipset. The industry realized that mobility by itself does not justify a subscription fee for mobile TV. Quality of experience (i.e., large screens, premium content, good QoS) is key in order to drive the uptake of paid-for mobile TV services. With the increasing availability of free-to-air services, the industry runs the risk of consumers thinking of mobile TV as a feature (like a camera or FM radio) instead of a service. In 2008, 76% of mobile TV users watched it for free.

3) How do you see the growth in adoption of mobile video and mobile TV affecting network infrastructure? Networks already seemed to be bogged down with data traffic. Are they ready for widespread adoption of mobile video and TV?
The rise of mobile broadband, added to the increasing popularity of smartphones (typically sold with flat-rate data plans), has certainly put a lot of pressure on 3G networks lately. Mobile operators are doing a lot to upgrade their networks as quickly as possible in order to accommodate the demand for mobile data. Fixed networks can only handle widespread adoption of online video and TV, and mobile networks are very far from it - especially considering that there are far more mobile connections in the world than fixed ones. However, there are other ways to get content on your handset than through the 3G networks. Over 90% of videos and music tracks on mobile phones are side-loaded from the PC. Taking control of this delivery mechanism and monetizing or reducing it is a big challenge for handset manufacturers and operators.

4) You recently published a report that discussed how, as the walled gardens come down, handset manufacturers are moving in to provide services to operators. Will handset manufacturers continue to drive and influence the wireless industry? Does anything threaten this influence?
The success of mobile broadband and flat-rate data packages has shown several mobile operators that they are better at selling access than content and that opening the walled gardens can work to their advantage. Mobile operators are therefore increasingly opening up to third-party service providers. Handset manufacturers, on the other hand, are suffering from a difficult economic context where mobile users opt for SIM-only contracts instead of handset upgrades. Handset manufacturers are therefore looking at alternative revenue streams and/or new ways to differentiate from their competitors, and content is coming up as a relatively good option. In addition, Apple has proved with its App Store that vertical integration of hardware, software and services works well in mobile.

5) Forrester recently published a report declaring that the term “smart phone” is dying off. Is there a future for mass-market handsets? Why or why not?
There is certainly still a future for mass-market handsets, which will be primarily driven by growth in emerging markets such as China and India. The recession has also helped to keep low-end handsets in the market. However, there has been cannibalization between feature phones and smartphones which are typically populating the mid-range and high-end device segments in Western markets. Smartphones have been taking market share from feature phones for the past 12 months, as smart phones become more accessible in terms of price and feature-rich. I would say that the term “feature phone” is more likely to die than the term “smart phone.”

Stay tuned for commentary from other key industry influencers on the trends and issues important to the mobile internet ecosystem. If you have any questions you’d like us to ask, feel free to leave a comment or send an email to sinfantino@bytemobile.com.

-Stacey Infantino

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I am pleased to announce two exciting new initiatives in Bytemobile Product Development. We believe that these initiatives will accelerate our momentum in China and advance our efforts to ‘green’ the mobile internet industry.

China Development Center
We have established our fifth development center – after Patras, Belfast, Champaign, and Mountain View – in Beijing. China is the world’s largest market for mobile services, and we are rapidly penetrating the provincial operating companies of China Mobile, China Unicom and China Telecom (see John Cole’s blog post on the China Mobile Web Gateway project). Given the growth of our customer base and the singular requirements of the market, it is only logical that China would be the next destination for the expansion of our global engineering team.

The new development center will focus initially on three areas:

• Customization of our products to meet local market requirements and support mobile devices used in China
• Localization of our product interfaces in Chinese languages
• Custom engineering to respond to customer requests with unique solutions

Our first priority is the adaptation of our products to local handsets. Therefore, our first engineer in China – who started last week – is focused on handset profiling and customization. Until now, we have performed this function in our handset laboratory in Patras. With the launch of our team in China, we will be more efficient and better able to meet local demand. We are also working closely with partners in the region to outsource parts of the process under the direction of the local team. As customer demand increases, we will ramp up the team to scale and manage the workload.

Our next priority will be custom solutions engineering in China. To date, we have performed this function in Patras and outsourced to key partners in Greece. The new center in Beijing will enable us to anticipate and respond to the local market and continue to drive our thought leadership throughout the region. We are actively recruiting solutions engineering candidates in the area and are also seeking candidates with a combination of global and local experience.

Green Network Platform
Greening the Mobile Internet and White Space Innovation are two strategic programs that we have launched in the last year. They intersect in a new research and development project designed to dramatically expand the capacity of the Unison Mobile Internet Platform and make a significant contribution to the sustainability of our customers’ network environments.

We launched the project – appropriately named ‘Fusion’ – on April 1, the day after general availability of the new Unison release. Our goal is to reduce our customers’ hardware requirements as they deploy and scale Bytemobile applications in their networks. The Unison platform is already the most scalable mobile internet gateway in the industry. However, Bytemobile has never rested on its laurels and isn’t about to start now. Rather than targeting incremental improvement, we aspire to the seemingly impossible: a ‘quantum leap’ increase in system capacity, which would yield a proportionate decrease in power, cooling and rack space requirements – and therefore in overall data delivery costs.

Because this is a white space innovation project, there are no limitations on methodology. We will evaluate technical solutions ranging from software changes to new operating systems to custom hardware.

Project Fusion will provide a useful model for white space innovation projects of the future. The ‘greening’ of the Unison platform will further enhance our strategic value to customers as they implement environmental responsibility in their network operations and service delivery.

Building a Great Company
Both the China Development Center and Project Fusion are ambitious undertakings. As such, they are consistent with Bytemobile’s history of global market and technological leadership. They also support our plans to continue building a great company that fundamentally changes the shape of its industry through innovation and localization.

-Chris Koopmans

Image use courtesy of www.flickr.com/photos/dongbin/3296818794/ under Creative Commons attribution license.

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