Restructuring the Global Wireless Information Market

Probably the four biggest potential changes that I think will have an impact on the global wireless information market over the next few years are 1) wifi and other short-range wireless, 2) moving cell phone-based information applications onto open source, 3) the size of the Chinese and Indian markets, and 4) 3G cellular data.

Five years ago Japan and Scandinavia were the “happening” cell phone markets. While most people in U.S. couldn’t conceive of typing emails on cell phones with their thumbs, there were already 30 million people in Japan using cell phones for messaging and web-based services. It was just more convenient to have Internet access on your phone. And in the Scandinavian countries everyone was doing SMS short messaging. Cell phone markets worldwide were quite different from each other, primarily due to one combination or another of culture, policy, and the state of prior communications systems.

Today, we’re a long way from homogenization, but potential changes over the next few years go across local markets and will have a huge effect.

Wifi in cell phones may just mean lower and lower average cost for more and more value on cellular service. As users get more and more for less and less, market growth may be fastest for the cellular providers that are quickest to incorporate wifi. It’s a chance for new leaders. Current leaders like Verizon in the U.S. and China Mobile in China may resist breaking down their “silo” business model where they want a percentage of any monetary transaction that happens over their service, like using a cell phone to buy using PayPal.

As for open source, I think it will rapidly become the way cell-phone based, enterprise-style information flow is done — things like field service dispatch, on-site sales quotes for customers, basic CRM applications — will go to open source because the quality and turn around time for innovation will be better than for close-source products. If improvements can be made overnight, and there are millions of users and thousands of developers networked on projects, the application space can grow pretty quickly. That’s great for the cellular providers because right now their enterprise application business is weak

The bottom line on China and India is that whatever happens there is going to be influential everywhere else. With 500 million and 150 million cell phone users as of the end of 2006, China and India are not exactly out of room to grow, either. So what are some of the things that are different there? Motorola sold 1 million Linux-based cell phones in China in Q2 2006, a $50 phone with low-power electrophoretic display by Motorola started shipping in India at the end of 2006, and there are plenty of good wireless engineering design shops in China and Taiwan experimenting with different feature sets and capabilities on shorter and shorter development cycles.

Finally, 3G and China in a certain sense are one and the same topic. Because China has been stalling on 3G service to give time to develop a perhaps licensing-independent 3G technology – TD-SCDMA – Chinese business will be in a position to control the market. The size of the market means everyone else will have to be a player on TD-SCDMA.

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