Mobile Internet taking off, but sales prospects limited

Mobile Internet taking off, but sales prospects limited

Mobile phone users have become increasingly confident that value-added content exists on the mobile Internet, but widespread interest in purchasing goods and services via this channel is so far limited to all but a few consumer categories, according to the quarterly Mobinet survey by AT Kearney and Cambridge University's Judge Institute.

For the first time since June 2001, the Mobinet Index found an increase in the proportion of mobile phone users who are using the Internet functionality of their phones. More than one-third of users from a sample of 5600 consumers across 15 countries said they have accessed the Internet on their mobiles phones at least once in the last month, a 25% increase since the last study in June 2002.

L C Mitchell, AT Kearney vice president and communications industry practice leader for the Americas, says: "The prospects for mobile data services seem to have turned the corner through a combination of greater phone capabilities, improved user experience and consumer comfort/confidence in using advanced phone features. The study points to clear revenue potential for next generation phone services."

Prospects for the sale of goods and services over the mobile Internet, however, appear far off. Only one-third of users said they would consider using the channel to purchase tickets and entertainment, 19 percent said they would purchase travel services and 13 percent said groceries.

Consumers' immediate concerns are far more prosaic, with more than 60% citing improvements to basic features such as sound quality and battery life as their most desired innovations.

Jaideep Prabhu of the Judge Institute of Management, Cambridge University, comments: "The future of the mobile Internet as a sales channel may....lie in product and service categories characterised by simple 'one-click' buying experiences, immediate delivery and well understood technical specifications, such as tickets, tolls and confectionery."

The study holds out hope for a practical migration path from SMS (text messaging) to MMS service offerings. In Japan, one of the markets where MMS capabilities were first available in 2002, users appear to be sending fewer text-based messages. Since the previous study in June 2002, the number of mobile users in Japan who say they never use SMS increased by 55%, to three quarters of those surveyed. However 21% of users in Japan reported sending photo messages, a key MMS capability, at least once per month - a rate four times greater than the rest of the countries studied.

"The SMS experience creates a fertile market for MMS and there is increasing recognition that users value these more complex capabilities," Mitchell says. "MMS provides a platform for a wider variety of customisable products and services that are an essential element to securing higher, sustainable revenue streams for mobile operators around the world."

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