THE mobile consumer market is currently driven by music and games, though mobile TV, which is available in only a few markets, has a revenue potential significantly greater than music or games.
MOBILE MUSICAsia contributes almost 50% to the worldwide mobile music revenue. The largest Asian markets are Japan and South Korea, accounting for over 50% of the Asian mobile music market. Both the countries are pioneers and world leaders in the mobile music market, having been the first to introduce ringback tones and full tracks. They continue to maintain their lead.
The mobile music market in Asia-Pacific is estimated at $6.0 billion in 2007 and is projected to grow at a CAGR (2005-2010) of 23.2% to $9.28 billion. (Table 1.) In-Stat says that the main drivers are growth of the region’s mobile markets, increasing 3G penetration, more music phones and mobile music services appearing on the market, and the rise of full truck music downloads onto the mobile phone. Ringtones are the primary revenue source for mobile music. However, in 3-4 years phones sold in Asia-Pacific will have true tone playback ability, which would slow down ringtone sales.
South Korea’s mobile music industry has surpassed the country’s conventional music industry. This gives an idea of the potential of mobile music market in Asia-Pacific. In 2007 and 2008, the number of mobile phones in India will reach a critical mass, giving a great boost to Asia-Pacific’s share in the global market.
In-Stat forecasts that music phones would make up 37.3% of phones sold in Asia-Pacific by 2009, up from 23% in 2005, primarily because of phone cost reduction. Polyphonic ringtone playback, which is a norm even in basic entry-level handsets, is creating a broader reach for mobile music and a greater market for music content providers. As users in highly populated countries such as India and China gain access to music phones, ringtone and full music track downloads are likely to be become more popular.
Music phones are now in direct competition with portable digital music players. New music phones being introduced have hard drives that can store thousands of digital songs and music playback and management software that can rival
the best of the digital media players. However, factors like battery life, storage capacity, interface, and PC connectivity in music phones are yet being addressed to make them competitive with digital music players. Apple’s iPhone is an important step toward such a phone.
MOBILE GAMINGMobile gaming in Asia-Pacific is estimated at $2.78 billion in 2007, up 29.9% from $2.14 billion in 2006. (Table 2.) Currently Japan and South Korea dominate the Asia-Pacific market, with a combined contribution of 42.9%. However, China and India are emerging as important players, showing the highest growth rates. According to a Nokia report, Asia-Pacific excluding Japan contributed 41% in 2006 to the global mobile gaming market.
In-Stat observes that Asia-Pacific mobile operators are increasingly promoting mobile gaming by creating WAP and Internet portals dedicated to the distribution of mobile games. They also encourage third-party distributors such as mobile content portals and content aggregators to distribute mobile games to mobile users. Mobile handset makers are launching their own mobile content portals, and are developing more mobile gaming-enabled handsets.
MOBILE VIDEOThe estimated mobile video revenue in Asia-Pacific in 2007 is $884.0 million, up 168.6% from $329.1 million in 2006. South Korea and Japan are the leaders in the mobile video market. Asia-Pacific’s mobile video revenue is projected to grow at a whopping 96.6% p.a. to reach $3.14 billion in 2010. In-Stat reports that most of the services have been Voice on Demand (VOD), wherein the mobile user downloads the videos into his mobile phone via the mobile operator’s networks. A few minutes of video streaming is equivalent to hundreds of mobile phone calls, and it is difficult to earn as much revenue for the few minutes of mobile revenue. Many Asia-Pacific operators are investigating the potential of broadcast video technology. In this a video signal is broadcasted to all mobile phones with the decoding technology, whereby broadcast mobile video will not take up the data bandwidth of mobile operators’ networks.
South Korea was among the first countries in the world to introduce mobile video VOD services and is the no. 1 player in Asia. However, Japan is projected to surpass South Korea in 2009. China is emerging to be a strong contender. From merely $55.0 million revenue in 2006, China’s mobile video revenue grew 301.5% in 2006 to an estimated $209.0 million in 2007.
Mobile gaming, music, and video services have their detractors, with the main complaint being the small size of the handsets, and the belief that consumers would not enjoy watching TV on miniature screens. However, Screen Digest points out that the services have taken off very well in Japan and South Korea, where broadcast mobile TV services have already been signed up by half a million subscribers in a few months.
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Table 1, Table 2, Table 3
