Content provider Handango expanded its library of wireless applications to include more than 10,000 ring tones and graphics, a move that places the company squarely in the wireless industry and a strategy that some think could create a significant business in the near future.
“There is definitely a market opportunity for an aggregator,” said John Jackson, a wireless and mobile technology analyst for the Yankee Group. “I think Handango has done an outstanding job in seizing that opportunity.”
The move is especially notable as Handango already provides 35,000 software titles for a variety of platforms, including Symbian, Palm and Java systems. Just in the past few months, the company has added more than 7,000 new applications from about 1,000 software vendors. After getting its start in the personal digital assistant market selling applications for devices using the Palm and Pocket PC operating systems, Handango has now set its sights on the wireless space by offering applications specifically for wireless PDAs, smart phones and most recently other mobile phones.
“After carefully watching the market and listening to our customers and platform licensees, we’ve decided to aggressively enter this market with what is arguably the largest selection of digital media to be found anywhere,” said Laura Rippy, the company’s chief executive officer, of Handango’s ring tone and graphic offering.
The move pits Handango against several entrenched ring tone and graphics players, including Moviso and Zingy. But there’s likely room for a variety of providers; research firm IDC recently predicted the U.S. market for ring tones would grow to a significant $1 billion by 2007. Such numbers provide ample evidence for Handango’s decision to enter the ring tone and graphics game.
“They bring to the carriers a very large and significant (application) catalogue,” said Linda Barrabee, a senior wireless analyst with the Yankee Group.
Indeed, wireless content such as ring tones and games so far has not lived up to most users’ expectations, in part because subscribers often are used to high-powered multimedia personal computers. However, that dearth of satisfactory content creates a serious opportunity, said Dana Tardelli, research director for the Aberdeen Group’s wireless services.
“There is a lot of upside,” he said.
The aggregator role is an interesting one in the wireless industry. Handango is looking to be the middleman between wireless carriers and application developers, and it so far has racked up an impressive distribution system. The company sells its lineup of Java applications through Motorola Inc.’s Internet site, as well as through Cingular Wireless L.L.C., Sega Mobile, Wireless Gaming Review, America Online’s Internet service and others. The company in recent weeks expanded those deals to include Sprint PCS, Nokia Corp. and Telus Mobility. Handango sits beside other companies like Jamdat Mobile Inc. and Tira Wireless, which also connect into carriers’ networks. But Handango is different in that it only resells applications, it does not create its own like several other aggregators do.
The Yankee Group’s Barrabee said wireless operators will rely on aggregators like Handango to flesh out their content offerings, but that such a position is tenuous. Barrabee said carriers only want to rely on a few aggregator connections so that they don’t have to manage dozens of different business deals-but at the same time most carriers don’t want to rely on one source for their content.
“The wireless carriers are right now in the driver’s seat,” Barrabee said.
In some cases, carriers have teamed with a single provider for data applications, such as Verizon Wireless and its BREW distribution deal with Qualcomm Inc. But in other cases, such as Sprint PCS’ Java offering, carriers have remained largely in command. Therefore, the role of the aggregator is not yet defined.
So what does the future hold for Handango and other aggregators? Some predict massive consolidation in the aggregator market, while others foresee a larger company-such as Java creator Sun Microsystems Inc.-jumping into the role and quashing smaller players.
“I think there’s a lot of other machinations happening,” said the Yankee Group’s Jackson. “We’re in the very early stages.”
