Although wireless industry leaders and commentators have long prophesized the importance of the business user segment in stimulating the wireless data market, some see that outlook changing as more consumer- and teenager-oriented wireless data services hit the market.
“Today’s youth market will be tomorrow’s business market,” said Stephen DiMarco, vice president of client services for analysis company Compete Inc. “You always go to the largest addressable market.”
According to a new Compete study released today, younger wireless shoppers gravitate far more toward data features than older shoppers. Text messaging, ring tones and games figure predominately in the decision-making process for teenagers and young adults, with between 70 and 80 percent of such shoppers evaluating wireless data services.
“I think the carriers have sort of stumbled into it,” DiMarco said of the youth market. “The feature that they (youth) look at the most is data features.”
DiMarco said when carriers first started looking to introduce data services, they saw business users as the obvious and primary market due to their higher income levels. But as time wore on, carriers discovered the drawn-out selling cycle required by the business user market, one that they were perhaps not prepared for. As a result, new prepaid pricing options and additional wireless games and entertainment services could serve to bolster the consumer and youth market.
“There’s no doubt that the wireless carriers are spending a lot of money to spur adoption of wireless data services,” DiMarco said. “But I think (uptake by business users) has been slower then they expected.”
Indeed, the wireless enterprise market has been slower than most expected. Those companies focused on selling wireless data services to businesses have all been forced to cut costs and streamline operations. Others have been forced to sell or shut down. The sluggish economy has played a major role in the lackluster wireless enterprise market, but those in the industry also point to the still-immature products and services available.
“I think platforms on the wireless level have been immature,” said Jake Sagehorn, director and general manager of Nokia Corp.’s business applications effort. “There’s been a tremendous number of (wireless data) pilots. What we haven’t seen is the large enterprises committing at an (executive) level.”
However, Sagehorn said that situation may be turning around, as the economy itself seems to be doing.
“I think in the next six months the trials turning into pilots will be turning into full-blown deployments,” he said. “I think the corner is starting to turn.”
Along those lines, Nokia announced its first vertical play into the enterprise. The company said it will offer a package of wireless data applications specifically designed for the real-estate market. The applications, including wireless e-mail and home listings with pictures, will be available over the Nokia 3650 and the 9290 devices. Prior to the push, Nokia has been offering horizontal applications aimed at all business markets.
A recent study from Deloitte Research supports Sagehorn’s positive outlook on the wireless enterprise sector. The firm found more than two-thirds of U.S. companies have deployed mobile-data applications and 70 percent plan major increases in investment in the technology during the next year.
“Mobile data offers a new opportunity to drive economic value, and companies adopting the technology identify tangible benefits,” said David Sult, author of the Deloitte Research study. “Yet most deployments have focused on the basics, providing cellular connectivity to existing applications and devices. The next movement must focus on reworking business processes and inter-company operations to capture greater economic value.”
The future of the wireless data market remains unclear, though players on both the business and consumer sides likely will continue to work to break open the nascent industry.
