Data Services Grow While Smartphone Prices Fall

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Mobile telephone users in the developed world are adopting wireless data services in large and growing numbers, leading to a rise in sales of smartphones that support these advanced functions. According to ABI Research analyst Shailendra Pandey, “Some of these data services are popular everywhere: think of music and ringtone downloads, or games. Others are commercially available only in certain world regions: mobile TV, for instance, is popular in Western Europe and parts of Asia, but is virtually unseen elsewhere.”

The operators are doing all they can to promote such services. Both Vodafone and NTT DoCoMo, in Europe and Japan respectively, intend to launch HSDPA services during 2006.


Operators are adopting varied strategies to push next-generation services, says Pandey, depending partly on the orientation of their customer bases. In 3Q 2005, NTT DoCoMo’s recently announced data services were predominantly business-focused, encompassing applications such as fleet management and workforce automation. Vodafone, on the other hand, has been building out more consumer-centric 3G services, including agreements for providing music downloads, games, and location-based services for consumers such as child-tracking. Hutchison 3G has announced that it will be rolling out 39 new UMTS applications for location services, video surveillance, and the mobile office.

“It’s too early to gauge the success of the new data services,” notes Pandey, “but if smartphone sales are any guide, the signs are good: in the 3Q 2005 they were up 134% compared to the same quarter last year.” One reason is that mobile operators are heavily subsidizing the prices of the handsets, which now cost about 25-30% less than they did a year ago.