News

"Sleeping Beauty" mobile portals need a kiss - IDC

Mobile portals are shutting. The excitement of a year ago - when mobile portals were "the next best thing" has collapsed. Is there a future in mobile data, really? - IDC thinks there is. But the sleeping princess needs something special ...

According to Rosie Secchi, analyst with IDC Europe, the current gloom is probably short-term.

Although the mobile portal market is going through a tough time, says Secchi, "we believe that in the medium-to-long-term, all the new technologies (WAP, HSCSD, GPRS and UMTS), together with new and personalized applications, will help mobile portals to become profitable."

Just over 10 months ago, [her report points out] mobile portals were being hyped as the next best thing and a large number of content providers and mobile operators chose to invest in the mobile data applications market. Since then, a few things have changed.

"In the last few months, several mobile portals have shut. One of these is Iobox, a subsidiary of Telefonica, which has recently closed its Swedish and Finnish businesses." The company offered entertainment and an email service over mobile handsets.

Another example given in Secchi's report is Speedy Tomato, which is owned by the Swedish mobile operator Telia. Telia closed its pan-European mobile portal in September 2001.

There is hope, Secchi believes: "Although the mobile portal market is going through a tough time, we believe that in the medium-to-long-term, all the new technologies (WAP, HSCSD, GPRS and UMTS), together with new and personalized applications, will help mobile portals to become profitable. Of course, we do not know which type of portal will ultimately be successful but we still believe that the success of any portal depends upon the quality and relevance of the services it offers to users."

There are several reasons that could help explain why mobile portals are not as successful as was expected.

· 3G application and services. The amount of money spent so far on UMTS licenses has left mobile operators with reduced resources for implementing new services when they are simply not making money from the network.

· The slowdown in the IT and telecoms markets. The financial services community does not have the resources they once had to drive the development of new mobile services. Consequently, mobile operators have slowed the development of new services and are focusing on cutting costs and increasing profit margins.

· Lack of interest from users. Users have not been "crazy" about using mobile portals services, mainly due to the failure of WAP. Many of the current services have not been designed well enough to drive usage. Instead, services in the short-to-medium-term should be about short, frequent, easily manageable bursts of user and location specific information, tailored to a small screen, limited memory device.

Secchi points out that there are still several industrywide issues, such as lack of inter-operability, limited handset availability and poor download speeds, that restrict possible demand.

In order to get the full potential of the portal in the medium term, portal providers should focus on creating a guided rather than controlled environment, establishing strong partner relationships, generating a mix of revenue streams, and providing a unique, customizable user experience.

"Advertising, entertainment services offered by mobile operators, content providers and third party companies will play a big role in the future success of the mobile portals in order to maximize revenues, as long as the campaigns are targeted, personalized and provide value to customers."