If handset makers think competition is tough now, just wait as users are already expecting more functionality choices and cheaper services when it comes to mobile device use and mobile Web access.
A new study, “Go mobile, grow,” from IBM’s (NYSE: IBM) Institute for Business Value claims that 80 percent of mobile device consumers want a service provider that offers more choice in terms of applications and services now available on a mobile device.
It also states that consumer demand for customization and personalization will propel innovation and even open standards in the mobile marketplace.
One reason is that new devices, such as Apple’s iPhone, are making mobile Internet use easier and more rewarding, according to study author Christian Seider, an IBM senior managing consultant.
iPhone users spent12.1 percent time accessing the Internet compared with just 2.4 percent for all U.S. mobile phone users, according to one recent study.
“Users are much more interested in mobile Web, and while the industry has been talking about it happening for a long time, it’s hitting now,” Seider told InternetNews.com.
Such trends are likely to foster even more mobile application development and energies around device functionality given that form factor and device hardware features, such as touchscreens, aren’t going to be compelling purchase factors down the road.
While mobile devices are still selling well, double-digit growth rates are no longer a common occurrence. From 2001 through 2007, for example, global shipments of mobile telephones grew 20 percent annually. Research firms expect that number will drop to about 5.8 percent going forward through 2012.
Yet despite growing adoption of mobile Web, a few challenges exist before mobile Internet arrives in full force, including device and wireless services costs, as well as connectivity issues.
“Mobile Internet users want the same experience they get on the laptop or PC. They don’t want to have to wait a few more seconds loading a page on their smartphone,” said Seider.
The market for mobile Internet services is estimated to reach $80 billion by 2011, and the number of mobile Internet users worldwide is projected to hit 1 billion — a 191 percent increase from 2006 and representing an annual growth rate of 24 percent.
Nearly 60 percent polled in the IBM study are interested in banking services, one of several utility functions users want along with stock trading, news, general browsing, e-mail and instant messaging.
But it’s not all transaction activity that’s wanted by user. The study states 53 percent want to use mobile TV services, and 45 percent want to buy music online.
Those results align with another recent study that indicates smartphone users are not just interested in the traditional business and work-related applications needed during the day.
One interesting finding in the IBM study is that the U.S. mobile Web interest isn’t on par with growth in other countries.
In China and India, for example, consumers are actually bypassing buying the first PC and instead are opting for a high-end mobile device offering the same functionalities.
In contrast, in mature markets, the mobile Web phenomenon is predicted to expend and complement the PC experience.
The study also indicates that vendor participation in a standards-based, open ecosystem for devices and services could be a boon for innovation. Another necessary strategic shift, states the report, is moving from a device-driven strategy to a service-driven approach.
For that to happen, IBM expects partnership strategies, new content delivery and management systems, as well as revenue models, to come into play.