Article of Interest  -  Internet Services

Handset Download Technology

Preparing for Markets Around User Customization

by Jay Horwitz, Ross Scott Rubin

November 8, 2001 -

From Browsing to Downloads

While networked PCs are well suited for extended data-browsing sessions with Netscape or Internet Explorer, handsets are not. Handsets are designed for mobility—to provide immediacy and execute focused transactions. WAP browsers that provide access to scaled-down Web content have defined mobile interactivity in the US for the last two years, but a new set of technologies for downloadable content is gaining prominence. Subscribers do not want dumb terminals—they want handsets that can be customized to their needs, personality, and whimsy. Handset download technology allows subscribers to customize phone features, messages, and functionality with objects such as ring tones, icons, and applets. Improvements in data transport protocols such as EMS, run-time environments such as Kilobyte Java, and management infrastructure such as the authentication server included in Qualcomm's BREW are creating a market for download formats. But services based on object downloads will take off only when terminal technology and bearer services evolve to yield an economical and satisfying consumer experience thereon. Resource-constrained handsets, few of which even have a common run-time environment, define today's platform.

Ring Tones Mark the Start

Ring tones are an indisputable hit worldwide. Adoption is especially intense among youth segments, and industry estimates agree that in Japan alone, revenues have totaled more than $300 million. However, more significant is what ring tones reveal about subscribers and the next wave of data services: the innate desire both "to stand apart" and "to fit in" with customized handsets. A recent Jupiter Consumer Survey found that 37 percent of US subscribers between the ages of 18 and 24 agreed that the ability to customize mobile phones would be an important consideration in their next purchase decision. (See Figure 1.) In harnessing this drive, original equipment manufacturers and carriers can find opportunities to attract youth segments and create differentiated services without deploying expensive infrastructure. In the US, both Cingular and AT&T Wireless have deployed ring-tone downloads using Nokia's Smart Messaging technology. This platform extends the transport mechanism that SMS provides to support the download of reference objects (i.e., instructions that customize handset features and settings). The low cost of content development, the effectiveness of the transport mechanism, and the simplicity of the retail channel all contribute to the success of ring tones.

Figure 1: Importance of Ability to Customize Ring Tones or Color Face

Appetite for Customizing Ring Tones, Color Faces Skews Toward Youth Segment

Question asked: How important are the following aspects of your next cellular phone upgrade or purchase? (above percentages reflect prospective cell phone buyers' responses regarding the ability to customize ring tones or color face)
Source: Jupiter/NPD Consumer Survey (8/01), n = 2,331 (prospective cell phone buyers, US only)
© 2001 Jupiter Media Metrix, Inc.

EMS Extends Text Communications

While text messaging has gained little traction in the US, Jupiter maintains that customizing text communications with support for pictures, sound, and iconography will propel use among youth segments. With limited terminal resources and interface capabilities, however, expectations for multimedia messaging (MMS)—including support for standard rich media formats—must be tempered in the near term. A viable platform for MMS will not present itself until 2005, when an installed base of handsets with sufficient memory, processing, and display capabilities address higher bit-rate networks in the US. PC-based messaging has experienced strong growth—increasing household reach by 29 percent in 2000—and has distinguished itself from both e-mail and telephony as a communications channel. While this success has primed a market for mobile messaging, it has also hindered growth of existing services. US consumers have performance and capability expectations that far exceed levels that existing cellular infrastructure provides.

EMS, which extends functionality that Nokia's Smart Messaging supports, is poised to emerge as an intermediate step between SMS and MMS. A boon to both handset manufactures and carriers in the near term, EMS capabilities will incite upgrades and present opportunities for new revenue streams. EMS includes support for formatted text, alternative fonts, predefined sounds, and pixel-based pictures—for peer-to-peer messaging as well as downloads from carriers and the Internet. Sound and picture objects are user-defined, factory installed, or downloaded from carriers and content providers such as Yourmobile.com and Genie—this represents a significant and nascent market for paid mobile content. Consumers largely bear upgrade costs: EMS rides on SMS infrastructure and includes support for messages that are larger than 160 characters, the current SMS specification for message length.

Sun Versus Qualcomm

Application run-time environments will allow subscribers to customize handset functionality according to their own needs; in concert with high bit-rate networks, this will create a rich market for application downloads in 2004. However, the battle to provide a standard environment across handset models in which applications can run is already underway. It sets a traditional software company, Sun Microsystems (Sun), against a traditional cellular phone company, Qualcomm. Divergent histories explain the two approaches: Sun focuses on supporting innovation among its primary constituency—developers—and Qualcomm focuses on its primary constituency—carriers. An open approach is less attractive to carriers but will ultimately drive the market for handset downloads with a rich pool of content. While uncertainty prevails, simultaneous support for both Sun's Kilobyte Java and Qualcomm's BREW will be common; however, supremacy will be determined by their respective attractiveness to application developers. In defining the target platform for their applications, developers stress technical attributes such as performance as well as business attributes such as reach. So how do they stack up? Java has momentum in the wireless arena—widely deployed in Asia and currently available through Nextel in the US—and a large supply of development talent worldwide. BREW faces a serious challenge in having to foster a development community from the ground up. BREW will also lack reach ultimately: It is optimized for specific handset functionality, but it only runs on CDMA chipsets, severely limiting the total addressable audience of subscribers. Java provides a reliable front-end to Java server functionality and supports third-party provisioning; on the other hand, BREW puts the carrier in control of certifying and managing application provisioning.

Figure 2: Infrastructure for Handset Downloads

Concert of Technologies Must Evolve to Support Handset Downloads

Source: Jupiter Research (11/01)
© 2001 Jupiter Media Metrix, Inc.

Related Research

                                    For more information please submit Information Request Form!

Send mail to webmaster@millenniumplus.com with questions or comments about this web site.