Skip to main content

How Walled Gardens Can Limit Mobile Growth

The message from U.S. mobile phone service subscribers to their network operators is clear -- stay on the same course and value-added service (VAS) adoption will be minimal.

Some 35 percent of respondents to an In-Stat consumer survey of primarily North American users still only use voice services from their mobile providers, reports In-Stat.

This presents a huge opportunity for the entire mobile service industry to get these consumers to partake of some mobile data and entertainment offerings, the high-tech market research firm says. That said, VAS growth tends to remain elusive.

"There is a potential dark cloud on the horizon for the cellular operators, however, as unlimited Internet access packages may disrupt today's enhanced service offerings, which are currently very tightly coupled to what a particular service provider wishes to offer," says Gerry Kaufhold, In-Stat analyst.

I believe that the mounting evidence that identifies closed "walled garden" business models as the primary growth inhibitor is undeniable. Granted, high-priced offerings have also significantly contributed to ensure that wireless VAS subscription is still an early-adopter phenomenon in the U.S. market.

In-Stat's market study found the following:

- Nearly 50 percent of respondents would use the Internet from an unlimited data package in place of other rich media services given the right pricing.

- Too many models of handsets confuse users and fragment the market for services.

- People up to 45 years of age will become surprise drivers for future growth of enhanced services, given the opportunity.

Popular posts from this blog

The $150B Race for AI Dominance

Two years after ChatGPT captured the world's imagination, there's a dichotomy in the enterprise artificial intelligence (AI) market. On one side, technology vendors are making unprecedented investments in AI infrastructure and new feature capabilities. On the other, there's measured adoption from customers who carefully weigh the AI costs and proven use case benefits. Artificial Intelligence Market Development The scale of new investment is significant. Cloud vendors alone were expected to invest over $150 billion in capital expenditures in 2024, with AI infrastructure being the primary driver. This massive bet on AI's future is reflected in the rapid growth of AI server revenue. Looking at just two major players - Dell Technologies and HPE - their combined AI server revenue surged from $1.2 billion in Q4 2023 to $4.4 billion in Q3 2024, highlighting the dramatic expansion. Yet despite these investments, the revenue returns remain relatively modest. The latest TBR resea...