Local Mobile Search Advisory
Different data sources are using incompatible yardsticks to measure key variables such as overall penetration, frequency of use and mix of services accessed by mobile subscribers. For the time being, plugging projections into business or product plans is as much art as science. LMS takes a look at the data and provides insight into the measured sources of discrepancies.
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Jingle Networks' 800-Free-411 for now is the "free DA" market leader. But it has been joined by a broad range of competitors:
This also doesn't include the voice-powered (or operator-assisted) applications:
There's also the mobile Internet itself, which competes with DA in some cases. In the future, mobile social networks may also address some of the queries that might have gone to DA (e.g., category searches). Right now the latter is quite speculative however.
Against that backdrop Jingle needs to continue to develop, market and differentiate its service if it hopes to stay ahead of this increasing competition. One way it has sought to do that is by offering Dial Directions service, which as of today is now available nationally: any location to any other location (by address or intersection).
To test it, I called Free-411 from both my landline and from a mobile phone. The service distinguished between them accordingly and didn't offer the option to get directions from the landline (because there's no ability to receive a text). But it did when I called from my wireless phone.
Dial Directions' service also has the option to skip getting to the highway, which is great. And overall it's nicely integrated into the Free-411 service and call flow.
Maps & directions are a high demand, high-use category in mobile generally and for DA in particular. It represents one of the motivating reasons people seek local telephone numbers from DA (to then get directions).
The addition of the Dial Directions service to Free-411, beyond providing more utility, also provides more ad inventory at the bottom of various texts that are returned with the directions information.
Dial Directions has a range of interesting additional capabilities that are so far barely exposed to the marketplace. Its speech-enabled events directions is one example. Its "Meet Me" social networking/invitations capability is another. And there's more in the pipeline.
Given their popularity on the desktop, it would seem there's an inevitability about social networking on mobile devices. Data aggregator Emarketer opines about the opportunity today in its newsletter promoting a new report:
LMS has its own point of view and a forthcoming document as well.
There are three categories of companies in this "mobile social networking" segment: mobile extensions of desktop social networks (e.g., MySpace, Facebook, Bebo), mobile specific networks (e.g., Loopt, Brightkite, BuzzD, Whrrl, etc.) and then a range of mobile offerings and applications that include social elements like sharing or friend finders and so on (Yahoo!'s Go, Where.com, ShoZu, 800-Call-411, etc.).
We just pulled consumer survey data (survey conducted by Multiplied Media) from the market that shows almost 90% of mobile phone users in North America have not and do not access social networks on their mobile devices. This of course is something of a microcosm of the larger question about mobile Internet access itself. But the two primary reasons that people offered for why they didn't access mobile-social networks were: no interest/need or no mobile data plan.
Mobile social networks or social media applications designed for mobile will grow over time and offer great utility to mobile users -- in fact, sharing and social features will be embedded in most mobile applications. But the monetization opportunity is not special or mysterious; it's primarily about page views (as on the desktop networks). It's basically about CPM or display ad revenue in mobile (for WAP-based sites). So as mobile Internet usage grows and more people get data plans, social networking traffic on mobile devices should grow too.
But the more interesting question is perhaps who will win and who will lose in this already very noisy space. The following is a partial list of companies in the segment presented in an earlier post:
This is only a partial list and doesn't include most of the desktop networks (save Twitter), which have an inherent advantage in mobile because of their installed user bases and greater awareness.
Related: Here's Nielsen Mobile data on mobile social networking for the U.S. and Europe (% of users accessing "social networks" on mobile phones):
The NY Times was reporting the other day that AT&T is selling the Motorola Z9 smartphone for $99 in the US with a two-year contract. This makes it a competitor of and in the same price range as the Palm Centro, also being sold for $99. The Centro has done very well for Palm, although I understand the margins are not great.
The iPhone is also potentially going to be subsidized by AT&T when the 3G version launches this summer.
Why is all this significant?
Smartphones comprise about 6% of the US market and perhaps a slightly larger share of the EU market. Price drives consumer adoption (hence the success of the Centro) and smartphones change user behavior.
Smartphone users access the mobile Internet and conduct mobile search three to four times as frequently as conventional cell phone users. This is even more pronounced at the highest frequency levels, with smartphone owners accessing the mobile Internet many more times and in higher numbers than conventional cellphone users:
Source: M:Metrics (2008)
Dan Miller and I met with Atlas (now a division of Microsoft) to get a look at the company's new "engagement ROI" model and related tools and tracking. It was very interesting and will be the subject of another post at some point somewhere . . .
But one of the several digressions we pursued was the issue of mobile handsets being used to track and extend traditional media. This is one of my favorite topics these days. And iMedia today has piece providing an overview of the area. It's primarily about 2D barcode technology.
However, SMS provides comparable functionality without the necessary downloads and/or "infrastructure." We would expect that eventually most traditional media (TV, print, outdoor, newspapers) will feature some direct response component using mobile devices -- call it "mobile response."
On the heels of its 3G rollout, the US division Deutsche Telekom of posted solid growth, reaching a 30 million subscriber milestone. According to the company's earnings release, "At the end of the quarter, T-Mobile USA had 30.8 million customers, adding 981,000 net new customers during the first quarter."
Here's a breakdown of the U.S. carrier subscriber numbers (not updated to reflect the new T-Mobile data):
Scott Jones, co-founder of ChaCha is reporting in a press release that ChaCha's new "mobile answers" service is "seeing usage rates that exceed 40 queries per month. Our most active users are tapping ChaCha multiple times per day resulting in over 150 questions per month."
Below is the paid/traditional DA call frequency data we collected in our earlier consumer DA survey.
Regarding mobile search frequency, we've observed anywhere from nine per month to nine per day in the case of one provider. Forty queries per month is consistent with average US desktop search frequency (per comScore), which is quite significant in terms of monetization potential.
The ChaCha figures also suggest what many people have been suggesting: that mobile query volume eventually has the capacity to overtake the desktop. The voice interface facilitates greater volume or frequency because it's intuitive and doesn't rely on keyboard entry.
Yesterday I wondered what was going to happen to Sprint, which had seen fortunes plummet in the past year and looked to be -- and may still be -- a takeover target. But today the WSJ is reporting that Sprint has become the majority investor in an important new joint venture to promote WiMax:
The venture includes wireless provider Sprint Nextel Corp. and Clearwire Corp., a start-up backed by cellphone pioneer Craig McCaw. Other big-name backers include cable-TV giants Comcast Corp. and Time Warner Cable Inc., Internet giant Google Inc. and chip maker Intel Corp. . . .
The new company secured $1.05 billion from Comcast, $1 billion from Intel, $500 million from Google, $550 million from Time Warner and $100 million from Bright House. Sprint will hold a majority stake in the new venture. But to appease concerns that Sprint might try to quash the new company's ability to compete with Sprint, Mr. Hesse agreed to give up day-to-day control to Clearwire's Mr. Wolff, who is slated to be CEO. Mr. McCaw is expected to be named chairman. The new company will take on Clearwire's name.
This certainly breathes impressive new life and potential momentum into Sprint and its WiMax initiative. It also strikes a blow against LTE (long-term evolution), the 4G (but much farther away) standard favored by Verizon and AT&T. Sprint's 3G network is already good and much faster and better than AT&T's 2.5G Edge Network.
There's no word yet on time frames for rolling out the network. Initially it will be about conventional Internet access but eventually would apply to mobile handsets and potentially a range of new UMPCs and other mobile devices.
Google gets a big boost here too. Here's more from the just-issued press release:
The agreements with the strategic investor group define significant new commercial relationships, including:
Here's Google's point of view on the deal:
[T]he network will: (1) expand advanced high speed wireless Internet access in the U.S., (2) allow consumers to utilize any lawful applications, content and devices without blocking, degrading or impairing Internet traffic and (3) engage in reasonable and competitively-neutral network management.
. . . and my post from Search Engine Land.
Belgium-based yellow pages publisher Truvo has launched a downloadable mobile, local search client (for Beligians) on the mobilePeople "liquid platform." The relationship was pre-existing and a similar announcement had been made last year.
What's also interesting here, as the release points out, is that Truvo, the old World Directories, is adding third-party content to directory listings to broaden the utility and use cases for the application.
Europe is a somewhat different market than the U.S. but the mobile arena replicates the early debate and competition between directories and search engines: can they win with a destination strategy or do they need to do "mobile SEO" and syndicate content? They not mutually exclusive strategies of course.
The rich client strategy also begs the question about whether consumers will download applications onto mobile devices en masse. On so-called feature phones applications may be more viable long term because they have limited capacity to browse the "mobile Internet" compared with smartphones. However, mobilePeople can also do and does WAP sites and portals.
Recently mobilePeople agreed to be acquired by partner Local Matters.