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News
Issue #2002 - 04 (January 2002)
(Updated Jan. 30, 2002)

MARKET OUTLOOK & TRENDS

The Ongoing Consumer vs. Enterprise Debate

In a society where instant gratification is demanded and time is a precious commodity, wireless devices have become our personal companions.

Once only found in the briefcases of business professionals, cellular phones can now as easily be found in the knapsacks of high-school students or the handbags of stay-at-home moms. According to David Pearce Snyder, lifestyle editor of The Futurist magazine, within 10 to 15 years, 80 percent of Americans will rely solely on a cell phone, making the wired line phone nearly obsolete.

Regardless of the mass appeal of cellular communication, wireless data services, especially in North America and Europe, are still being built on business models that target predominantly the business user.

Taking a page from the business strategy of DoCoMo’s highly successful i-mode service, where the primary focus is on meeting the needs of the consumer first and the business professional second, wireless network operators would realize that corporate contracts are not enough to finance their sophisticated infrastructures.

The recent string of Chapter 11 filings among wireless data service providers, such as Motient and OmniSky, as well as public WLAN vendors, such as MobileStar, reinforces the argument that a consumer-based subscription model is necessary to generate profits.

Even though a recent study by Cahner In-Stat projects that the public WLAN market will increase from $3.9-million in 2001 to $225-million in 2005, it is difficult to imagine that success will come based solely on business-oriented marketing plans that target the business traveler.

If the relative short history of the cellular communications market is any indication, wireless data services should be targeting the individual at work, at home and at play if they are expected to generate profits for debt-laden wireless operators.

(Sources The Dallas Morning News)

Mobileinfo Comments & Advisory: This is an interesting viewpoint expressed in morning newspaper and we bring this to your attention for serious analysis. We have no problem in the fundamental conclusion. However, the paper is unable to bring home to business development executives fundamental realities as well. First fundamental reality is that adoption of personal devices can come from both sides - corporate to consumer or consumer to corporate. While cellular voice (never mind the digital entertainment) may be an example for the latter (as per i-Mode example in Japan), PC and fax machine adoption are examples of the former. Secondly, consumer-based adoption of technology that makes fundamental changes in our habits take much longer than what most entrepreneurs and business enthusiasts are willing to accept. If it is voice, it is consumer-oriented first. If it is wireless data, it is enterprise-oriented first. Thirdly, it is the price and cost of entry. For consumers, it must be low. For enterprise, it can be high. Profit margins are lower but spread across a wider market size in case of consumers. Consumer technology is easier to introduce - will accept cookie-cutter approach. Enterprise requires custom solutions - therefore, it is more difficult. At the end of the day, we still believe that as far as wireless data is concerned, enterprise is the place to make money today. Consumer market will be the place to make far more money tomorrow or more realistically day after tomorrow. more debate? Please send us your viewpoint.

Note: This news release may contain forward-looking statements. Readers should take appropriate caution in developing plans utilizing these products, services and technology architectures.  All trademarks used in this summary are the property of their respective owners.


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