While voice is still the key application for wireless carriers going into the 21st century, a variety of other data-centric applications are becoming more important. Carriers and the rest of the industry are looking toward mobile gaming, banking, messaging and other, more advanced wireless applications as potential goldmines in coming years.
But the situation is progressing more slowly than most in the industry anticipated. The wireless Internet, thought to be the spawning ground for the next big application, isn’t catching on like some industry observers predicted, and carriers are slowly testing the mobile data waters to see what profits can be made.
As a result, the mobile data tune has changed from wireless Internet to 2.5- and third-generation networks. Many are waiting to see if faster transmission speeds will draw more customers, drive up mobile data use and create new and powerful applications. However, that outlook has been tempered lately by carrier executives, who have backed off from the rhetoric of mobile data applications to discuss the benefits of increased capacity for voice with the advent of enhanced networks.
Voice may remain the industry’s major application for the foreseeable future. But that’s not stopping anyone from dreaming about what else is possible.
Adam Guy, a senior analyst with The Strategies Group, said the applications that will be popular and successful will offer three main features: They will be personal, location specific and time sensitive.
“It’s really got to be worthwhile for the user,” he said.
These types of applications would let users find and reserve a table at a nearby restaurant or sign up for special wireless offers from favorite stores. The functions of these types of applications will be virtually limitless.
But before applications like these get to the consumer market, they likely will be tested by tech-savvy businesses, Guy said.
“The early adopters … are going to be businesses,” he said.
Knox Bricken, an analyst with The Yankee Group’s wireless mobile services division, agrees.
“Enterprise markets will generate more revenue,” she said.
As mobile data applications begin to catch fire, businesses likely will be at the forefront of carriers’ customer bases. Sales-force automation, mobile workforces and wireless customer resource management are all tag lines for the types of applications that businesses will pay for, Bricken said.
And while the industry not-so-patiently waits for more advanced applications, the nation’s carriers are slowly working to build up their mobile data offerings today. Guy said the types of applications that are doing well today are ones that offer relevant, text-based information. Wireless banking, stock quotes and messaging-proven by the success of short message service in Europe-are all high on the list.
And what tops the list as the No. 1 application? For AT&T Wireless Services, games are it.
“It’s because it’s a time killer,” said R. Larry Atwell, director of business development for the carrier’s multimedia division.
Atwell, who focuses on the company’s PocketNet wireless Web service, said mobile games are the carrier’s most popular application. Wireless customers can knock off a few games while waiting for the bus or their next flight, and carriers are able to reap the revenues. So while the wireless industry dreams about profits from location-based technology and high-speed access, the majority of wireless data users today happily open their wallets for games that are not much more advanced than 30-year-old Atari games.
“Gaming is very high; gaming is probably the highest” on the list of popular applications, Atwell said.
AT&T Wireless offers about 20 mobile games on its PocketNet service, including such hits as Blackjack, Gladiator, Merchant Princess and Alien Fish. Atwell said the company recently added some multiplayer games, a feature that could lead to even more use.
Beyond gaming, Atwell said news, sports and financial applications, such as stock quotes and banking functions, are also popular applications for the company. And in an effort to please its customers, AT&T Wireless is working to bolster these categories-in the last 90 days the carrier added the Boston Globe, CNN and several other news organizations to its growing list of content providers.
“All these areas that are important to our customers … my team and I are focused on that,” Atwell said.
One more application AT&T Wireless is benefiting from is messaging. The company counted 1 million two-way messages during its past financial quarter, and company executives hinted the number would be much higher this quarter.
While carriers continue to bolster their mobile data offerings in hopes of landing more customers and finding the so-called killer app, a variety of analyst firms are offering hope in their predictions for the massive revenues future applications will generate.
Research firm IDC recently predicted mobile application revenue-generated from traffic, advertising, sponsorship and subscriptions-will increase from $3.3 billion this year to $44.8 billion by 2005. While this number is a tally of European data services and applications, U.S. carriers can likely expect some measure of success, and many are betting on it.
