3G MMS Breakout

US : Photo messaging has found strong awareness among global mobile phone users and appears to be the first breakout capability of next generation multi-media messaging services (MMS), according to the latest Mobinet study of 5,600 mobile phone users in 15 countries conducted regularly by global management consulting firm A. T. Kearney and the Judge Institute of Management, Cambridge University's business school.

The findings underscore the growing penetration of advanced mobile phone technology and point to a strong potential revenue stream for mobile carriers able to capitalize on photo messaging awareness among their customers.

More than 80 percent of mobile phone users in the study were aware of the photo messaging capabilities of today's mobile phones, and two-thirds said they were willing to pay to utilize those services. Among those under 19 years of age — the heaviest users of text-based messaging — 42 percent said they would be willing to pay more than $1 US to send a photo message. Fourteen percent of all users were prepared to pay more than $2 US per photo message. More than 30 percent of those surveyed said they would be willing to use photo messaging at least once a week in the future.

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 said they have accessed the Internet on their mobiles phones at least once in the last month, a 25 percent increase since the last study in June 2002.

"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," said L. C. ("Mitch") Mitchell, A.T. Kearney vice president and communications industry practice leader for the Americas. "The study points to clear revenue potential for next generation phone services. The challenge for mobile operators will be in structuring service offerings and pricing plans that respond to the unique needs of individual customer segments and implementing internal processes to exploit these opportunities."

The study also demonstrates that a practical migration path is evolving 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 percent, to three quarters of those surveyed. However 21 percent 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 said. "MMS provides a platform for a wider variety of customizable products and services that are an essential element to securing higher, sustainable revenue streams for mobile operators around the world."

Additional findings from the latest study include:

Mobile phone users have become increasingly confident that value-added content exists on the mobile Internet. Since June 2002, the number of mobile Internet users and non-users who say poor content limits their interest in accessing the mobile Internet dropped by 73 percent and 81 percent, respectively.
Mobile text advertising continues to grow. More than half of mobile users surveyed said they had received advertising text messages, a 26 percent increase from the June 2002 study. The number of users who said they purchased something in response to these ads remained constant at three percent. The average price of items bought in response to mobile advertising was between US$50 and $100.
Widespread interest in purchasing goods and services via the mobile Internet appears limited to a few consumer categories. More than one third of users said they would consider using the mobile Internet to purchase tickets and entertainment, 19 percent said they would purchase travel services and 13 percent said groceries. As many as 70 percent of these purchases have been stimulated by impulse or experimentation rather than convenience.
While new handsets come with impressive new features, more than 60 percent of users said their most desired mobile phone innovations were improvements to basic features such as sound quality and battery life. Advanced phones that skimp on these basics to add new features could present a potential barrier to the acceptance of next generation mobile technology.
"Consumers seem to prefer traditional computers for the research phase of their purchase decisions," said Dr Jaideep Prabhu of the Judge Institute of Management, Cambridge University. "The future of the mobile Internet as a sales channel may therefore lie in product and service categories characterized by simple 'one-click' buying experiences, immediate delivery and well understood technical specifications, such as tickets, tolls and confectionery."

The Mobinet Index
This unique research project was initiated between global management consultant A.T. Kearney and Cambridge Business School - the Judge Institute of Management. For Mobinet 6, approximately 5,600 interviews were conducted with mobile phone users in 15 countries: Australia, Brazil, Canada, China, France, Germany, Hong Kong, Italy, Japan, Korea, Singapore, Spain, Sweden, the United States and the United Kingdom. The feedback is consolidated and analyzed and forms the basis of the index.

The Mobinet study has been conducted regularly since June 2000.

Judge Institute of Management
The Judge Institute of Management (www.jims.cam.ac.uk/) is the University of Cambridge's business school. Founded in 1990, it has over 300 students and 80 teaching and research staff. It offers a portfolio of undergraduate, graduate and executive management programmes, including the Cambridge MBA. Teaching and research benefit from a wide range of associate faculty in other departments within the university. The business school hosts one of the largest concentrations of interdisciplinary business and management research activity in the Europe.