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Mobile Multimedia Services Asia-Pac Upside

At the end of 2009, IDC expects mobile multimedia services to make up 11 percent of total mobile services revenue in Asia-Pacific excluding Japan (APEJ) -- surpassing SMS revenue contribution for the first time.

In 2008, almost at par, SMS contribution to revenue was 10.3 percent, while mobile multimedia services amounted to 10.1 percent. IDC predicts that SMS contribution will plateau at 10 percent for the next few years, while mobile multimedia services will continue to ride on growth trajectory.

Early drivers of growth in mobile multimedia content have been ringtones and wallpaper downloads, particular with the younger demographics.

"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," said Alex Chau, Senior Research Manager at IDC. "This has spurred content and application developers to develop tens of thousands of applications to satisfy this new demand amongst mobile users."

Up until recently, mobile handsets did not feature advanced operating systems and connectivity that allowed quick content transfers. Subscribers were unable to share downloaded content with others, resulting in low adoption for content services.

Today's setting is very different, as most mobile devices have, at minimum, built-in networking capability such as USB, Bluetooth, or WiFi. This gives mobile users tremendous freedom and a broader access to content for personalization of devices as well as to share the content.

The proliferation of EDGE, 3G UMTS and 3G HSPA-enabled handsets has helped to spur the demand for mobile multimedia services over the years. However, the next stage of growth will require 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.

As competition amongst the mobile operators intensifies across the region, IDC believes price will no longer inhibit the uptake for new services. In developed markets, the differentiation between operators will come down to price alone.

In the past, early adopters could leverage network quality and new services as a selling point to attract users, but as competitor networks matured, these advantages quickly disappeared.

Many operators will try to avoid the inevitable as long as possible by offering exclusive contents but with more competitors such as Apps Stores entering into the market, the market will become more competitive, which will lead to an eventual price war, benefiting mobile users in APEJ.

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