Mobility stakes to rise as market gets saturated

Mobility resellers will have to up their expertise levels or risk getting left behind when mobile phone sales reach saturation point in Australia next year, an IDC analyst has claimed.

Warren Chaisatien, senior wireless and mobile communications analyst at IDC, has completed new research suggesting that mobile phone penetration will reach its “natural saturation” point in 2005.

Resellers would thus have to increase their skills and add more complex services if they were to keep growing mobile device revenues, he said.

“I think their role is going to get more complex and they will have to be prepared for this,” Chaisatien said. “Clearly, the resellers ... will have to be dealing with more IT solutions and solution providers and also wireless carriers.”

He said that about 85 percent of Australian residents were potential mobile phone owners aged from around 11 to approaching 80 years old. Seventy-nine percent of residents owned mobile phones at the start of 2004.

Some 82 percent of Australian residents were expected to own a mobile phone by December and the 85 percent mark would be passed some time in 2005, Chaisatien said.

He said, however, that people would begin to use multiple mobile devices and various SIM cards in different devices. Also, some would replace their land lines with mobile phones. Total mobile phone sales would therefore go on slowly increasing, to hit 89 percent by 2008, he said.

“Mobiles have been previously used mainly as a voice communications tool,” Chaisatien said. “Going forward, as wireless technology is actually implemented by business in order to mobilise IT applications, there will need to be a skills change.”

He said that resellers might face increasing competition from large IT vendors -- such as Microsoft and Telstra -- partnering with ISVs to move into the mobility space, particularly on deals around creating single application suites that would allow enterprises to mobilise point applications.

“I think smaller businesses are still turning to these resellers and saying, 'can you help me mobilise a particular application?'. They will get a lot of requests of that nature and have to deliver that, particularly as wireless moves from voice to non-voice,” Chaisatien said.

This year, mobile phone services would grow $8.7 billion and voice would remain the “killer app”, making up the bulk of carrier revenue. However, non-voice would be the biggest revenue and profitability driver for the next five years, he said.

Further, the introduction of 3G nationally in late 2005 -- a move which Chaisatien believed would happen via carrier network-sharing -- would boost that market and slow down prepaid sales, today's main mobile revenue driver.

Australia's 3G user base was tipped to leap from about 300,000 in 2004 to 3.55 million in 2008. Eventually, 4G -- where all wireless standards interoperate -- would bring on a new phase that IDC has dubbed Always Best Connected (ABC) mobile computing some time towards the end of this decade.

Michael Bosnar, MD at mobility-focused distributor eXeed, said some resellers would have to decide whether to make the investments needed to take advantage of the changes in the market landscape. Some resellers had done a good job, but many were stuck in their comfort zones, he said.

“I think that some in the IT industry are used to taking orders -- the customer says 'I want 50 HP [boxes] delivered today' and they'll just take the orders. And with this sort of stuff, you can't just do that with a [3G] telephone, you've got to go out and sell it and it's pretty aggressive,” Bosnar said.

The changes in mobile and wireless currently were exciting, Bosnar said, as users got, for example, the ability to access network files and information on notebooks and PDAs and more devices began to work together.

“It's almost like the IT industry was, probably about 12 years ago, when the ability to multi-process on the desktop was starting to come along and Windows and other applications were coming, all those things were happening in IT,” he said.

The sales opportunities were extensive. There was more money to be made in enabling employees, for example, to remotely connect to a network application such as Microsoft Outlook than in setting up Microsoft servers, Bosnar claimed.

“This is just the entree. The main course is going to be even more exciting,” he said.