Market research report: Software for Mobile Communications

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Background

Market Research Report:

Software for Mobile Communications Devices
SRI Consulting

Following is an excerpt from a report by SRI Consulting, co-authored by Ed Christie, Molly Clay and David Rader. This Report is sixth in a series of seven Competitive Arena Profiles offered to clients of SRI Consulting's Media Futures program. This report examines the competition among companies that are developing and marketing software for mobile communications products. For more information, contact Ed Christie, Director, Media Futures Program, SRI Consulting.

The statistics and analysis included here are not endorsed by Intel and are given for informational purposes only. Intel does not endorse any forecast herein.

Implications for Service Providers

Laptops—not PDAs or cellphones—will dominate the wireless data market.

In the focus on the growing role of data in mobile devices such as PDAs and cellphones, it’s easy to overlook that the largest market for wireless data services is portable PCs—laptops and sub-notebooks, including those running Microsoft’s Windows CE. These portable PCs will either use wireless modems (PCMCIA cards) or attach to a cellphone that acts as a data modem.

Not in this definition of wireless data are services that aim at two-way pagers and advanced cellphones (such as Nokia’s 8000/9000 series products). Of course, to the extent that cellphones are used to provide data access for portable PCs or PDAs, true wireless data services will be a feature of many cellphones.

Portable PCs will dominate this market for two reasons:

• The installed base is huge—80 million, growing to 250 million in 2003 (versus just 12.5 million PDAs).

• Laptop users need untethered access more than PDA users do because of the powerful programs they run.

Note that data services for PDAs and PDA/cellphones will be roughly equal, even though PDAs will have a far larger installed base—12.5 million versus 1.3 million. SRI Consulting assumes that people will buy combination PDA/cellphones partly because of their data access capability, whereas many PDA users will find standard PDAs useful even without data access.

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Bluetooth

Although not strictly software but an evolving specification for short-range radio-frequency technology, we profile Bluetooth here because it could have a strong influence on the development of both software and hardware in the mobile communications market. Named after King Bluetooth, tenth-century unifier of Denmark, it is backed by an Intel/Ericsson/Nokia/IBM/Toshiba alliance.

Bluetooth allows automatic communications between digital devices such as PDAs, digital cellular phones, and PCs within a ten-meter radius. Intel, Ericsson, and Nokia founded the Bluetooth Special Interest Group (BSIG) in order to establish a short-range radio frequency standard. By late 1998, the BSIG plans to release specifications; it hopes that Bluetooth-enabled products will be available by fall 1999.

By enabling simple data synchronization and wireless communication between PDAs, handheld computers, and mobile phones, Bluetooth could accomplish the convergence of computing and communications now accomplished by the smart phone. Equipped with Bluetooth, multiple, limited-functionality devices might serve consumers better than a single, complex device.

Applications:

Device-independent mobile data. Bluetooth allows users of portable computers, PDAs, and mobile phones to optimize the data-communication abilities of each device. A user who does not wish to open a cumbersome notebook computer could use Bluetooth to receive e-mail through the notebook’s modem for reading on a cellphone—even if the computer is inside a briefcase. An owner of a notebook computer without a wireless modem could use the device’s ample keyboard to type e-mail that could be sent via a mobile phone. Finally, a Bluetooth user could access the Internet through a cellphone while receiving Web pages on a notebook computer or PDA.
Wireless access to peripherals. Bluetooth offers simple wireless connection of PCs with printers, fax machines, and other potential PC peripherals, including PDAs.
Ad hoc conferencing. Bluetooth would permit ad hoc meetings, with workers in airports, hotels, and conference rooms sharing data on notebook computers or PDAs without wired connections.
Hands-free mobile phone use. Bluetooth’s voice capabilities could extend the usability of mobile phones and computers with speech-recognition or recording capabilities. A cordless headset equipped with Bluetooth could transmit voice to and from a mobile phone, thereby permitting a user to have a hands-free conversation in the office or the car. Users can also interact with a notebook computer, PDA, or PC by sending voice commands through the headset.
The integration of digital cameras with mobile digital devices. After taking a picture with a Bluetooth-equipped digital camera, a user could send images from the camera to a mobile phone, PDA, notebook, or printer. After adding any desired comments or messages, this user could then transmit the images through a wireless network.