Cloud Four Blog

Now that you understand the size of the mobile market and the fact that it is ripe for explosive growth, what should your business’s mobile strategy be?

The answer is: no one knows for certain.

The reason why many businesses don’t have a mobile strategy is because mobile is long on potential and short on specifics.

The specific strategies that will be successful for your business are varied and many are unproven. We can look at compelling case studies like:

• Blyk which provides a phone service for 18 to 24-year-olds in Europe that offers free mobile and text messages in exchange for personal information and targeted advertising. Since launch, Blyk’s advertising has garnered a 29% response rate. Direct mail and web advertising rarely exceeds 1% response rates.
• ESPN.com which reported that mobile visits to their web site exceeded visits from desktop browsers during a recent 24-hour period.

These case studies show what is possible when you combine the right strategy with mobile-optimized content. But in both cases, you would be hard pressed to argue that either Blyk or ESPN are following proven strategies.

Instead, mobile is most reminiscent of the early days of the Internet when companies were just beginning to think about how this new technology might transform their industries. This period was full of experimentation as everyone rapidly tried to figure out how to build successful businesses and corporate strategies in this new world.

Our experiments will be better this time around because we have better infrastructure. We can draw on the lessons we’ve learned over the last decade. And we will be better equipped to measure our success.

But just like the early days of the Internet, those companies that are forward-looking—the companies that take risks and explore what is possible—will be rewarded with an early lead in this emerging market.

In the last post in this series, we examined the size of the mobile market and how mobile adoption dwarfs that of television, PCs and automobiles. With such a large market, why aren’t more businesses working on their mobile strategies?

One reason why many businesses haven’t taken the mobile industry seriously is because we’ve heard the story before. Every couple of years mobile carriers or phone manufacturers would tout the soon-to-be-released dream of a smart mobile device in your pocket.

The title of my last post quoted Dr. Eli Harai of San Disk who recently called mobile the mother of all markets. But this isn’t the first time the mobile market has been called that.

In 1992, then Apple CEO John Sculley told the New York Times that “pocket-sized digital communicating devices” could be “the mother of all markets.”

Fool me once.

For the last few years, mobile phones adoption has out-paced other technologies. So the widespread adoption of mobile phones alone isn’t enough to warrant new optimism.

What’s changed that makes 2008 different than 1992 or even 2006 when it comes to realizing the mobile potential?

• The iPhone’s easy-to-use interface.
• Full web browsing experiences led by iPhone’s Safari browser and Opera.
• Flat-rate data plans.
• Phones with Wi-Fi support built-in and the many public Wi-Fi hotspots
• The push for open platforms—whether truly open like Google’s Android mobile operating system or the pressure that led Apple to release an iPhone SDK.
• The push for open networks including the open network requirements placed on the recent wireless spectrum auction and the commitment by major U.S. carriers to be open networks by the end of 2008.

Momentum in the mobile market has accelerated to such a degree that not a day goes by that there isn’t another company releasing some major new initiative. Today alone, AOL announced a mobile platform, Nokia launched a major mobile advertising platform, and Microsoft bought Danger, Inc., the producers of the HipTop/Sidekick phones.

There is still work to be done and the question remains whether 2008 will be a transition year or the year mobile technology skyrockets. But it is no longer possible to look around and conclude that mobile isn’t poised to take off.

It used to be that when people would tout what was possible with mobile phones, we had to look no further than our own phones for a harsh reality check. Now when someone pulls out their iPhone, Blackberry or Nokia N95, the future seems a lot closer than it ever has before.

Dr. Eli Harai, CEO of Sandisk, recently declared that “The mobile phone market is the mother of all growth markets.” I usually recoil when hearing what sounds like hyperbole.

However, Dr. Harai isn’t exaggerating when it comes to the size of the mobile market.

There are 3.3 billion mobile phones in the world—that is one for half the world’s population. Tomi T Ahonen has an exceptional article that helps put 3.3 billion in perspective by comparing it to other technology:

As you can see from the chart above, there are more mobile phones in the world than there are cars, televisions, telephones, PCs, and credit cards. And the number of mobile phones continues to grow at astronomical rates:

The global population expands by three people a second, according to International Data Base, an arm of the U.S. Census. In the same second, 38 wireless devices will be sold. At that rate, within 24 months another billion devices will be added to the 2.5 3.3 billion currently in circulation. — Source: USA Today [ed. number of phones corrected]

With 3.3 billion phones in use today and only 6.6 billion people on the planet, it would seem like growth would slow down, but instead the number of mobile phones being sold continues to increase. There are a couple of reasons for this.

First, in many countries in the world, mobile services are over subscribed because people have both a home and a work cell phone. Italy, for example, has a 140% subscription rate. Therefore, while there are 3.3 billion phones in use, there are not 3.3 billion people with mobile phones.

Second, many developing countries have eschewed building the costly infrastructure required to support land lines and have instead focused on building mobile networks. Recycled phones from other countries are often sold or given away in developing countries.

So we have a very large market and one that continues to grow. What does this mean in real dollars? Again, we turn to Tomi T Ahonen:

The total service revenues for mobile already passed 720 billion dollars last year (Informa Jan 2006). Toss in another 100 billion for handset sales and some more for network infrastructure and we’re at a total industry of over 875 billion in size by 2007 – well on target to hit a trillion dollars as an industry by the end of the decade.

Tomi also asserts that SMS alone accounted for 100 billion in revenue last year. That is as “big as total Hollywood box office, total Hollywood DVD sales and rentals, total music industry revenues and total videogaming software revenues in 2007 – combined.“

If that doesn’t cause you to sit up and take notice, I don’t know what will.

What we have with mobile phones is the largest media market in the world by a long shot and a market that is continuing to grow.

So why aren’t more businesses working on their mobile strategies? To answer this question, we’ll take a closer look at both the history of the mobile phone and the parallels to the ’90s Internet expansion in future posts.

This post kicks off a multi-part series on the mobile web that previews some of the topics for my presentation next week at the Portland Web Innovators Forum.

Why do I choose to describe myself as a mobile evangelist in addition to my more practical titles of web developer and strategist? Because it’s a mobile web. Most people just don’t realize it yet.

I understand why people might ignore or dismiss the mobile web. I remember attending Web Visions a few years ago when the theme was digital convergence. I listened to a speaker paint a wonderful vision of mobile devices that were always connected and communicated to our televisions and toasters.

This wonderful mirage would fade the moment I turned on my cell phone. My phone couldn’t talk to my television. I had trouble simply getting news. The much talked about mobile web was a joke.

That was then. This is now. Or if you want to put it in other terms, that was BI (before the iPhone). This is AI—After the iPhone.

Yet, we’ve all heard the siren call of the mobile web for years. It is no wonder that people doubt whether or not the mobile web is for real this time.

That’s why I’m a mobile evangelist. We need more people spreading the word.

I believe that anyone who takes the time to understand these factors

• the total size of the mobile market;
• the rapid growth of the mobile market;
• the similarities between the mobile web now and the early days of web growth; and
• the role the iPhone plays as a harbinger of a new generation of mobile phones

will understand why Eli Harai, CEO of Sandisk, recently said, “Wireless is the mother of all markets.”

And once you understand this to be true, then you start to see the ways that this mobile transformation will challenge your business and the opportunities it presents.

So stay tuned as we take a closer look at each of these factors over the coming days and plan on attending PDX Web Innovators on Wednesday if you want to get more details.