The Cellphone PC: Why Mobile Internet is Reaching Critical Mass

What is the future of the mobile Internet? Will advertisers clamor to cellphones? How will user-generated content hit a tipping point on cellphones? DigitalJournal.com investigates why the cellphone will soon become the ubiquitous pocket-sized PC. Digital Journal — The days of using a cellphone for calling, texting and gaming are over. The mobile browser wars are back. Apple’s iPhone ushered in a new era of addictive applications. And watching video on the mobile Web has become commonplace. As the cellphone morphs into more than just a voice communication unit, consumers want to know where mobile Web is headed. In the same vein, advertisers are hopeful the “third screen” will evolve into a potential venue for profitable placements. As cellphone penetration soars, mobile Web use is increasing. More than 40 million cellphone-toting Americans have taken advantage of mobile Internet as of May 2008, according to research from Nielsen Mobile. That’s up from 29.7 million users in May 2007. At a 16 per cent penetration rate, Americans topped Britons (13 per cent) and Italians (12 per cent) in browsing the Web on a mobile. When over half the world’s population has access to a cellphone, the tipping point for mobile Web is around the corner. In fact, Nic Covey of Nielsen Mobile says the critical mass moment is here. “The U.S. is a highly competitive cellphone market where operators have done a great job is pushing their advanced data services,” says Covey in an interview with DigitalJournal.com. He cites the success of 3G networks — commonly found on smartphones such as the iPhone — for improving network speeds as much as six times as its predecessors. “If you look at the iPhone, it’s built for media use,” Covey notes. “And Apple has done a fabulous job at promoting the media-centric nature of the device.” When a hot technology finds its market niche, expect the advertisers to come a-calling. AdMob, a leading mobile advertising marketplace, said it served some 249 million advertisements to iPhone users since releasing special ad units for the device on July 2007. But as popular as the ad market for iPhone may be, Covey says mobile advertising hasn’t reached a level the carriers or manufacturers truly crave. “There’s trepidation of jumping into mobile advertising,” he says, “but advertisers have to realize there is a large enough audience using cellphones to enable a massive marketing campaign.” He foresees a future where advertisers will turn to cellphones because “it will allow marketers to engage with customers in unique ways.” He highlights location-based services which know where you are in a city and can offer you discounts on nearby stores via SMS messages. But will the public embrace this Big Brother-esque scenario? Maybe if it offset costs. “The advertising subsidy will bring down monthly plans, making cellphones even more affordable for consumers,” Covey says.

Courtesy Action Engine

Action Engine's Scott Silk sees a future in creating powerful Net-friendly apps for mobile customers

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Many services available for cellphone users are opt-in, so there wouldn’t be a barrage of ads assaulting cellphones without warning. Another cellphone-content player envisions a not-too-distant future where participatory media comes alive on the small screen in your pocket. According to Scott Silk, CEO of Action Engine, which creates mobile applications, social networking and chat services tied to MTV shows are on their way to a cellphone near you. “These kids don’t want a parent hovering over their shoulder while they use a PC,” Silk says, “so it only makes sense they’ll create their own code language on their cell. They want technology to help them communicate with each other.” Action Engine has worked with brands such as AOL, DowJones, TiVo and Golf.com to let cellphone users stretch a phone’s functionality beyond call and answer. The company’s applications average more than 55 ad impressions per user per month, with some applications driving average monthly impressions per user as high as 99. As Action Engine’s success story attests, and as evidenced by the millions of downloads flooding Apple’s App Store, the cellphone will evolve into an instrument of diverse functions. Entertainment may be one purpose but reading news may be another. It seems like the only challenge providers face is the technology and speed driving those applications and features.

The new browser wars

Similar to the PC browser battle, mobile browsers are also locking horns to win supremacy on the third screen. Last week’s beta launch of Opera Mobile 9.5 signalled a new salvo in the conflict, which also includes major players such as Safari, Nokia’s mini-map browser, Firefox’s upcoming mobile version and Bitstream’s ThunderHawk. These browsers boast powerful speedy engines ideal for smartphones. iPhone’s Safari is reigning as the number-one mobile browser primarily thanks to the robust hardware it accompanies, allowing cellphone junkies to get their Net fix easily. The lesson is clear — give users a great browser and they’ll enjoy it. The next part of the equation is giving those same users a robust cellphone built to display complex websites and Flash-heavy pages. “The mobile browser market continues to be dynamic as hardware vendors embrace a variety of options for their family of devices to best meet their business, technology, and partner requirements,” says Michael Wolf of research firm ABI Research. They conducted a study which found overall growth in the mobile browser category will lead to revenue of $492 million by 2013. All the pieces are in place for mobile Web adoption, says Tejas Rao, product technology director of Nokia Canada. “The high-end handsets are here, the mobile browsers are ready, and websites can easily viewed on these screens,” he notes. He views the adoption process akin to taking pics with a cellphone — the widespread trend didn’t occur overnight, and he expects surfing on a cell will also finds its niche soon. When the browser battlezone stakes ground on the mobile platform, it can only mean good news for the consumer. Competition breeds innovation, and innovation will power mobile technology to reach heights never before seen by the public. Cellphones have the potential to become those mini-PCs long prophesized by futurists and tech experts. What remains to be seen, though, is when that transition will come and how the super-sized cellphone will change our digital lifestyle.