Just 1 in 5 consumers are willing to pay for directory service on their cellular phones and only 7 percent would pay for local search, JupiterResearch said Tuesday.
While more than 8 in 10 online consumers carry out local searches on their computers through search engines like Google Inc., Yahoo Inc. and Microsoft Corp.'s MSN, few wireless subscribers have used their cellular phones for similar searches.
All the major search engines offer mobile search at no charge, but carriers often charge for delivering the data to the phone. In addition, vendors, such as software maker Vindigo Inc. and carrier Verizon, offer search applications that can be downloaded.
"The adoption of these data services and technologies on the phone isn't that high yet, and usage isn't that intense," JupiterResearch analyst Julie Ask said. As a result, "it's just going to be hard to make money over the next few years."
JupiterResearch believes ad-supported information services will have the best chance for success, although there may be a smaller market for premium data.
In the meantime, a number of factors need to come together in order for the market to grow, Ask said. Phones will need to have user interfaces that make accessing information easy and fast, cellular networks will need more bandwidth and wireless carriers will have to spend more on marketing their services.
With revenues for many carriers flattening, they're depending on data services to drive growth in a saturated market for voice service, Ask said. However, it's unclear whether wireless subscribers will be able to afford to spend more than they already do.
"That's the million-dollar question," Ask said. "They're hoping data will fill the gap, but it hasn't yet."