inCode Announces Top 10 Global Wireless Predictions
for 2007
Key Trends Include Internet-like Services, Multi-Function Handsets
at Affordable Prices, Mobile Ads and More Asian Influence
SAN DIEGO, Jan. 25, 2007—inCode Telecom Group, Inc., a global
business and technology consulting firm, today revealed its Top 10 Global
Wireless Predictions for 2007. The predictions help identify emerging
wireless trends for the year and indicate ways that consumers and businesses
will benefit. These trends include widespread use of mobile social networks,
greater choice in multi-function devices and more wireless home entertainment
options.
“Over the past few years, consolidation rationalized
and stabilized most wireless markets,” said Bengt Nordstrom, Chief Strategy
Officer for inCode. “Now we’re ready for the next level, where Internet
services are mobilized and deeply woven into our everyday lives, whether
we’re at home, work or play.”
In 2007 affordable handsets and service bundling will
make mobile data a more attractive offering in established markets,
where third-generation (3G) networks could become the preferred choice
for most customers. Flourishing infrastructure and handset businesses
in Asia will help bring low-cost wireless to emerging markets, enabling
many small businesses to join the economic mainstream.
Here are some highlights of the 2007 Predictions (full
text follows this release):
- Compelling Internet brands, such as Google, Yahoo and Skype, give
wireless operators a run for the money
- Prices of multi-function 3G handsets with various combinations of
music, location, video and other capabilities dip below $90 USD
- A seismic shift occurs as wireless technologies are developed and
deployed first in China and India, rather than Europe and North America
- To own mobile marketing channels, global brands may subsidize handsets
and services for target demographics
In 2004, 2005 and 2006, the inCode Top 10 Predictions
proved more than 80 percent accurate. To view previous predictions,
go to: http://www.incodewireless.com/insights/top10.aspx.
inCode 2007 Top 10 Predictions for the
Global Wireless Market
Operators
1) Social
Networking Gets Mobilized. Mobility is added to existing Internet
business models, services and behaviors, driving traffic for wireless
operators. Teens and twenties accustomed to constant connectivity and
habit-forming Web sites, such as MySpace and Facebook, lead a wave of
membership in mobile social networks. Location social networking including
friend and event finder services gain popularity, even in the professional
and over-50 segments. Google, Yahoo and Skype are more compelling for
users than wireless brands, which are hard-pressed to compete. As customer
appetites for social data and video services spike, wireless operators
offer more “all you can eat” pricing for high-end data packages. Social
networking applications initially are preloaded on many mobile devices
sold and later become downloadable.
2) Mobile
TV—Now Showing for Early Adopters. In the short term, wireless
users are unlikely to plunk down US $5.99-9.99 per month for mobile
TV service. Instead, look for per-view or per-minute pricing for “sneaking,”
a consumer tendency to watch key minutes of a sports event or drama
while engaged in another activity. Sneaking leads to more regular viewing,
and within 3-5 years, mobile TV becomes an indispensable service. When
Verizon Wireless and MediaFLO launch early this year, expect both user-generated
and professional content consumed and shared in many ways. Broadcast
TV is the primary driver of revenues and consumer adoption, but peer-to-peer
video gains interest, too. Operators square off with content providers
over control of the subscriber relationship and user experience.
Devices
3) Multi-Function Devices Become Cheaper and More Versatile.
Intense competition and margin pressure continue in the handset market,
forcing prices of third-generation (3G) handsets below US $90 and making
them affordable for a wide range of users. Seeking to replicate the
success of camera phones, device manufacturers produce more multi-function
units with music-playing, location, video and other capabilities. These
lower-cost, multi-function handsets help wireless operators increase
traffic and margin. However, like swimming pools at hotels, some functions,
such as music, are “must haves” used only by a few. Still, inCode estimates
that 20 percent of all handsets sold in North America are application
specific—built for a usage proposition, such as music or video consumption
or business productivity. WiFi handset capability could become the Trojan
horse that allows Internet companies to bypass revenue from mobile subscribers.
4) Location-Based Services: And the Winner Is. . . GPS! Yes,
GPS is the location technology of choice for the wireless
industry. Handset manufacturers continue to push GPS-enabled handsets
as the technology evolves from popular in-car satellite navigation systems
like TomTom to a broadly accepted feature in wireless phones. With Nokia
having launched its first GPS-enabled handsets in early 2007 and bandwidth
available to support new multimedia services, location-based service
providers build critical mass. Since there are 10 to 20 times more mobile
phones sold than any other consumer electronics device, wireless is
a huge driver for GPS adoption. That’s great for users and handset vendors,
but the benefit to operators isn’t clear.
Equipment
5) AOL, Yahoo! and Google Multimedia Platforms Challenge IMS.
As multimedia service platforms emerge, Internet service providers build
their own media architecture. That poses a risk to telecom operators
adopting an IP Multimedia Subsystem (IMS) approach. However, IMS needs
a flagship application and develops slowly until entrepreneurs and venture
capitalists create innovative IMS services as they did with the Internet.
YouTube demonstrated the two key success factors for these services:
1) Access to millions of users and 2) Inexpensive, peer-to-peer marketing.
Intelligent Networking (IN) in the mid-1990s provides another useful
example. IN took off when operators discovered they could use the technology
for business 800 numbers and prepaid wireless.
6) China and India Tilt Equipment Market. Together, China and
India connect more than 10 million wireless customers per month in 2007,
creating a subscriber base that is larger than Vodafone’s at 200 million
customers. By the end of the year, China finally starts issuing 3G licenses.
Wireless technologies are developed and deployed first in China and
India, rather than Europe and North America as in the past. The result
is a significant shift in industrial influence. Although Chinese infrastructure
vendors may be viewed as the “Wal-Mart of wireless,” that’s more perception
than reality. Chinese manufacturers make rapid technology improvements
and aim for long-term strategic advantage. Expect intensified focus
to ensure a strong Asian influence in the 4G market.
Media and Advertising
7) Mobile Advertising Breaks Loose. Major brands shift from
basic SMS marketing to more sophisticated multimedia advertising. RBC
Capital Markets expects mobile marketing revenues to balloon from $45
million in 2005 to $1.5 billion by 2010. With the technological ability
to target and measure the effectiveness of mobile advertising, brands
are more strategic in their approach. Operators under increasing price
pressure set limits on current handset subsidization. Brands take up
the slack, subsidize handsets and services for target demographics and
take direct ownership of marketing channels. Rich 3G content and video
services and accuracy advancements in GPS-based location services deliver
further value to brands targeting existing and potential customers in
innovative ways.
8) Wireless Providers Move into Home Entertainment. This year,
mobile makes headway against fixed broadband operators, who have dominated
Internet and cheaper voice service provision in the home. WiFi remains
the primary wireless access technology. Low cost femtocells and combined
WiFi/High-Speed Packet Access (HSPA) routers emerge as attractive alternatives
to VoIP over WiFi. The fixed operators may be strengthened by WiFi capabilities
in consumer electronics devices (set-top boxes, game consoles and MP3
players) that enable cost-effective content downloads. However, innovative
business models for HSPA give mobile operators a real way to fight back,
particularly in emerging markets.
Enterprise Wireless
9) Wireless Security Moves to the Forefront. Put strong security
measures in place. This could be the year that hackers really start
paying attention to millions of wireless devices, the growth in mobile
data usage and vulnerable points between mobile and fixed networks.
CIOs consistently cite security as their number one concern in extending
network access to wireless devices. Attacks, viruses and data security
now exceed device loss or theft as concerns. Emerging services, such
as VoIP and mobile payments, provide additional challenges. Vulnerabilities
directly affect the bottom line, corporate image, regulatory compliance
and competitive advantage. In the consumer segment, seamless mobility,
off-portal content, IMS and convergence evolution continue to create
new business needs for end-to-end security solutions.
10) Enterprise Mobility—It’s for Real Now. Enterprises can’t
resist the convenient, reliable, attractively priced, bundled mobile
solutions entering the market. Corporations switch from phones to mobile
computers for transactions, data collection and messaging for a wide
variety of employees. Many voice communications processes, such as order
placement and delivery notifications, dispatch operations and remote
asset monitoring, continue to shift to wireless data to increase information
access and field transaction volume across organizations. Many corporations
completely replace their cellular handsets with a combined voice/data
device or a data-only device.
The inCode “Wish” for 2007:
While inCode predicts the above trends, it also sees a subject
that the global wireless industry should address this year:
Operators Go Back to Basics and Finally Get Them Right. Battery
life. Coverage holes. E911 access. Confusing bills. Frustrating customer
service. Wireless consumers have heard all about new high-end services
that add to their monthly charges. But they’re still beefing about niggling
problems that detract from the user experience. With penetration higher
than ever worldwide, the wireless industry needs to make big strides
in quality, efficiency and customer service. inCode wants improvements
in device component technology and an intense focus on smoothing and
simplifying the entire wireless value chain.
About inCode
inCode (www.incodewireless.com),
a VeriSign company, is a global wireless business and technology consulting
firm. inCode develops and implements high-impact strategies and solutions
to help increase the profitability and performance of wireless networks.
inCode also helps guide enterprises in harnessing the power of wireless
communications for productivity and competitive advantage. inCode understands
where the wireless world is going and how to get there first. On Nov.
30, 2006, VeriSign, Inc. (NASDAQ: VRSN) acquired inCode. VeriSign operates
intelligent infrastructure services that enable and protect billions
of interactions every day across the world’s voice and data networks.
Additional news and information about the company is available at www.verisign.com.
TRADEMARKS
VeriSign and other trademarks, service marks, and logos are registered
or unregistered trademarks of VeriSign and its subsidiaries in the United
States and in foreign countries.
Copyright © 2007 VeriSign, Inc. All rights reserved.
Media Contacts:
Elizabeth (Lisa) Malloy, VeriSign , +1-202-270-7600, lmalloy@verisign.com
Lisa Eppert, Coracle Group LLC, +1-619-934-8099, leppert@coraclegroup.com
Paul Nolan, Companycare, +44 (11) 89 39 59 00, pauln@companycare.com
Statements in this
announcement other than historical data and information constitute forward-looking
statements within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. These statements
involve risks and uncertainties that could cause VeriSign's actual results
to differ materially from those stated or implied by such forward-looking
statements. The potential risks and uncertainties include, among others,
the uncertainty of future revenue and profitability and potential fluctuations
in quarterly operating results; increased competition and pricing pressures;
and the uncertainty whether the predictions set forth herein will materialize.
More information about potential factors that could affect the company's
business and financial results is included in VeriSign's filings with
the Securities and Exchange Commission, including in the company's Annual
Report on Form 10-K for the year ended December 31, 2005 and quarterly
reports on Form 10-Q. VeriSign undertakes no obligation to update any
of the forward-looking statements after the date of this press release.
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