Mobile
Commentary
3/31/2008
06:37 PM
Sean Ginevan
Sean Ginevan
Commentary
Connect Directly
RSS
E-Mail
50%
50%

CTIA: Just Who Is It For?

We're here at CTIA Wireless 2008, the cellular industry's trademark show in the United States. This year's show kicked off with Smartphone Summit, where the morning held tracks discussing everything from market stats from leading analysts to the latest and greatest smartphones.

We're here at CTIA Wireless 2008, the cellular industry's trademark show in the United States. This year's show kicked off with Smartphone Summit, where the morning held tracks discussing everything from market stats from leading analysts to the latest and greatest smartphones.Regardless of the panel one attended, there was one inescapable fact: Consumers dominate the cellular industry, or at least that's the conventional wisdom. When I asked a panel of smartphone vendors why it's taken so long for Wi-Fi to penetrate U.S. devices, Dr. Muzibal Khan of Samsung stated that the company is looking to see what consumer demand is like with regard to Wi-Fi. (I was secretly hoping someone would say that it's indeed a conspiracy by carriers to keep Wi-Fi-enabled devices out of users' hands, as some have speculated. My bet is that, if that's the case, with more "unlimited" voice and data plans you'll see more Wi-Fi-enabled phones, as it's in the carrier's best interest to have users leveraging these "alternative" wireless networks as mobile data gains in popularity.) When Symbian CEO Nigel Clifford gave his keynote with executive VP of marketing Jørgen Behrens, much of the discussion revolved around the new features consumers could expect.

That's not to say that there's no regard paid to enterprise IT. Every panelist noted their company's focus on the business segment. Symbian noted its SQL features forthcoming in Symbian 9.5, which should support terabyte-sized databases. All the smartphone manufacturers mentioned how they've focused on providing both consumer-oriented and enterprise-oriented handsets, even in the same hardware form factor (witness Motorola's Q9 series). And the later sessions of Smartphone Summit include panels on mobile security and unified communications, topics that clearly focus squarely on enterprise IT.

But what I found interesting was the question of whether carriers are paying enough attention to the needs of the enterprise. According to numbers presented by Bill Hughes of In-Stat, corporate liability users, those who have their cellular devices paid for and provided by their employers, bring in $81 in revenue, compared with only $26 for the "average consumer." Users who are reimbursed for their cellular usage by their employers and even customers who simply eat business cellular charges also outspend consumers, though it was difficult to tell just how much these users spend by the slides presented.

In the end, by Hughes' calculations, it costs $25 to "support a user," so while there are lots of consumers out there, they don't drive the bottom-line profits nearly to the extent that business users do. Part of the reasoning for the revenue disparity is that business users of all stripes tend to use more smartphones that allow for advanced services, mobile data plans, and more voice minutes than the average consumer. With consumers beginning to adopt smartphones and the availability of unlimited voice plans, who accounts for the most profit may shift. But today, at least according to Hughes, businesses drive the bottom line.

So why do the themes of this year's CTIA seem to focus on such topics as social networking, location-based services, mobile video, femtocells, and other clearly consumer-oriented features? When I asked analysts on the panel, they noted that selling to the enterprise is very different from the consumer segment they're accustomed to. It's far more time-intensive and custom-tailored for each business. Carriers also may not have realized quite how profitable the enterprise segment can be. Finally, many of the technologies that have made their way into the enterprise have their roots in the consumer space. If Hughes' numbers are right, the cellular industry may want to focus less on the next way to integrate with Facebook or MySpace and more on how to integrate with ERP or the corporate intranet.

Comment  | 
Print  | 
More Insights
InformationWeek Elite 100
InformationWeek Elite 100
Our data shows these innovators using digital technology in two key areas: providing better products and cutting costs. Almost half of them expect to introduce a new IT-led product this year, and 46% are using technology to make business processes more efficient.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Tech Digest - August 27, 2014
Who wins in cloud price wars? Short answer: not IT. Enterprises don't want bare-bones IaaS. Providers must focus on support, not undercutting rivals.
Flash Poll
Video
Slideshows
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Howard Marks talks about steps to take in choosing the right cloud storage solutions for your IT problems
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.