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Mobile games will boom as MMS languishes

Talking Strategy

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Downloadable games will be a major money-spinner for mobile operators in 2003, but picture messaging will not be as popular as anticipated.

These are two of the ten predictions for the global wireless sector in 2003 by research agency Strategy Analytics.

Others include SMS and e-mail usage in businesses to continue its rapid growth, MMS to be increasingly exploited by enterprises, and shipments of wireless PDAs to increase by 160 per cent during the forthcoming year. In addition, it said that 2003 will be "another non-event" for W-CDMA 3G outside of Japan as subscribers numbers fail to break the five million barrier.

According to Strategy, downloadable games will be the fastest growing consumer application during 2003 and will generate $2bn by the end of the year.

However, it predicted that several factors will hamper the growth of picture messaging during 2003. These include free trials, slower than anticipated cross network interoperability, and the fact that only 7 percent of phones sold during the year will contain an integrated camera.

Within businesses, instant messaging will experience "dramatic growth," and SMS and e-mail use will generate nearly $6bn in revenues globally in 2003. The research company also said that businesses worldwide will spend over $1bn on photo and video messaging as their employees seek to leverage MMS to tap into centralised expertise for assistance.

In terms of wireless companies, it forecast that Samsung's anticipated 20 per cent profit margins will fuel a challenge to Motorola's number two market share position, and LG will overtake the Sony-Ericsson partnership, which Strategy envisaged will most likely split in 2003, in the top five of global handset vendors. Meanwhile, Verizon Communications will fall from the top ten of global operators after it sells its largest international asset, Italy's Omnitel, and debt loads will force T-Mobile's new management to divest non-core assets with T-Mobile US top of its list.

In a separate report, Strategy Analytics advised mobile operators to develop partnerships with both branded and micro-content in order to deliver a variety of material that will given them the edge over highly popular Internet portals.

It also recommended that operators adopt a per-message based MMS pricing scheme, which, it said, would be simple for consumers to understand, stimulate end-user experimentation, and ultimately drive higher MMS usage.

Strategy warned that despite the positive outlook for MMS in the long-term, the slow diffusion of entry-level MMS handsets into the large "data hungry" pre-paid mobile user base, and limited inter-operator MMS agreements, will stifle growth over the next few years. It estimated that less than 15 per cent of handsets shipped in 2003 will be MMS-enabled.

© ENN

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