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Cellphones, with their index of personal contacts, knowledge of a user’s location, ubiquity, and hallowed place in nearly everyone’s pocket, are the perfect devices to transform online social networking to truly mobile social networking. As carriers, handset manufacturers and third party application developers come together, it’s anybody’s call as to who will lay claim to this wild frontier.
The paths ahead
As carriers and handset manufacturers head into this territory, they will attempt to dominate or facilitate its future. Domination will be extremely difficult given the diversity of carriers, handsets and the rapidly changing nature of social networks. Facilitation is less of a challenge but carries with it less direct revenue and loyalty. So far many of the best current mobile social networks have gone this route.
The lay of the land
Social networks are currently a very active hub of online activity with nearly half of all 18-24 year olds with cellphones visiting a site at least once per day and many more who are less regular in their habits. The Internet traffic this generates is tremendous. The structure of social networks emphasizes this high-traffic pattern through activities generalized as communicating, sharing, following, joining and consuming. But for all this torrent of activity, it remains, for the most part, online.
For most users, cellphones are poor substitutes for the larger screens and comfortable keyboards of a home computer. The activities that have migrated to cellphones are sharing and following – primarily because they are the most reciprocal of social networking activities and because they are the easiest to use from a cellphone. Twitter is an excellent example of how successful just these two activities, the simplest and least data intensive parts of a social network, can be if implemented well. As the major players in this field, that being the carriers, handset manufacturers and third-party application developers, refine their approach and product, the other social networking activities can be expected to grow.
Consumers just waiting to migrate
Only a minority of mobile social network users are power users, users who social media consumption far outstrips the general populace, indicating a fairly even adoption of mobile social networking that is limited more by execution than demand. Content creation is good example: cellphones are great at creating content like pictures and audio but very few users move this content off their phones and onto social media sites. Some of this is contributable to users who are more used to sharing and following than communicating, but perceived high costs and the associated difficulty of actually getting this content off the phone are other significant factors. There are some exceptions to this, the iPhone and Nokia’s Share on Ovi come to mind, but currently represent only a small part of the market and potential activity.
Those who do actively access mobile social networks and post content have fewer inhibitors than the general population with a greater adoption of data plans and a higher use of cellphones as their primary camera. As cameras improve and unlimited data plans grow, content creation within mobile social networking can be expected to follow.
Which pioneers will profit most?
While the mini-me versions of social networking sites will lift data adoption, it misses out on a very important part of the puzzle. The most potent business opportunity of this realm lies leveraging the unique status and abilities of cellphones to take advantage of and expand the services social networking offers. Its ability to know a user’s current location opens up a level of utility almost unapproachable by online-only access.
How lucrative these opportunities are for carriers, handset manufacturers, and third-party application developers depends heavily on how this landscape is shaped. Dominating strategies promise to be hugely profitable but difficult to pull off, needing a number of strategic decisions between the carrier and handset manufacturer. AT&T and the iPhone come to mind on this front, and as anyone can see, their efforts have so far been very successful. It remains to be seen if they will further refine their offering to capture more of the market or if their competitors will come out with similarly integrated offerings. Facilitating strategies, while less profitable for a single carrier or handset manufacturer, do promise easier entry and a very dynamic mobile social networking ecosystem driven primarily by innovation (and likely ad revenue) on the part of application developers.
So far there has been a lot of activity from handset manufacturers and social networks, but little in the way of carriers. As mentioned above, there is an exception to this, and it’s this exception that the media, industry and consumers are carefully watching. It’s the moves made now that will determine who defines and who is defined by this brave new world.
Questions or comments about this column? Contact Seth at SFowler@jupiterresearch.com or Julie at JAsk@jupiterresearch.com or contact RCR Wireless News at rcrwebhelp@crain.com.
