APAC mobile multimedia services to dethrone SMS

Mobile multimedia services will surpass short messaging service in revenue contribution to Asia-Pacific region excluding Japan by year-end, reports IDC.

By year-end, revenue from mobile multimedia services will overtake that of short messaging service (SMS) for the first time to become the top non-voice service in the Asia-Pacific region, excluding Japan, according to a new report.

Released Monday by IDC, the report predicted that mobile multimedia services will constitute 11 percent of total mobile services revenue by end 2009 and continue to grow. On the other hand, SMS revenue contribution will stagnate at 10 percent over the next few years.

In 2008, revenues from both categories were on par, with SMS contributing 10.3 percent and mobile multimedia services, 10.1 percent, said IDC.

The report identified ring tones and wallpaper downloads, which attracted younger demographics, as the early drivers of mobile multimedia content.

Spurring the growth of mobile multimedia services is the advancement in mobile phone technology, IDC said. Up until recently, mobile devices did not feature advanced operating systems and fast connectivity needed for quick content transfers, which hampered uptake of content services, the market analyst explained. Common in many mobile devices today, however, are built-in networking capabilities such as USB, Bluetooth or Wi-Fi, which offer users broader access to content for personalization of their devices or for sharing.

"Today, the emergence of handsets featuring larger screens and even touch-screen interfaces has pushed the uptake of mobile multimedia services to a new level," Alex Chau, senior research manager for mobile and wireless technologies or services at IDC Asia-Pacific, said in a statement.

"This has spurred content and application developers to develop tens of thousands of applications to satisfy this new demand amongst mobile users," he added.

The next stage of growth, Chau noted, requires mobile operators to invest in and upgrade mobile networks in the region in order to handle the explosive mobile packet data traffic growth. "In the markets where operators have already upgraded to HSPA 7.2, 14.4 Mbps and HSPA+ 21 Mbps, the take-up of USB-dongle HSPA cards has been overwhelming, driving operators to ration the registration of new subscribers," he said.

Going forward, mobile operators will increasingly lose differentiators such as network quality and new or exclusive services, added Chau. Instead, in developed markets, uptake of services will boil down to price. The addition of app stores will further spark a price war that ultimately would benefit users, he said.