Mobile World Congress 2008, Barcelona – Convergence the talk of the town

From 11-14^th February, 55,000 visitors, 8,300 delegates and over 230 chief executives and other high-level speakers attended the Mobile World Congress in Barcelona – the mobile industry’s largest conference.

The huge critical and decent commercial success of the iPhone has thrown the traditional mobile industry into a conundrum. ‘Convergence’ has been an industry buzzword for years but it has now become a reality that mobile companies have to deal with; but is it too late? And who out of the online giants is best positioned to reap the rewards in the fast-growing £300bn mobile market?

On Tuesday, the big 5 UK service providers – Orange, T-Mobile, 02, Vodafone and 3 - struck a pioneering deal to develop a common system for mobile advertising. Advertisers, agencies and developers of content have long been bemoaning the lack of information and transparency in the industry in terms of measuring consumer behaviour - Gideon Bierer, MTV Networks International Senior VP of digital told C21 Media, “All the information I get from the European mobile industry about the performance of my content for the past year I could fit on one piece of paper - I'm not joking.”

The working group formed by the service providers will finally attempt to resolve this problem by defining a common mobile advertising measurement system, similar to those in place for TV and print. This data should allow the mobile market to develop ad-funded models for video content and gives the traditional companies a head-start on the likes of Google, which is preparing for an aggressive entry into the mobile market.

T-Mobile is dropping Google as its major search engine in favour of Yahoo!, losing them 90 million mobile users in the process. They believe that Yahoo!’s Web ‘n’ Walk service, that provides more practical information for users – e.g. searching for “Italian Food” will not bring up a lengthy, tiresome Wikipedia entry tracing the origins of the use of basil back to 400 BC, but instead bring up a map Italian restaurants in the local area – will be more appropriate for mobile users. Nokia, however, has secured a deal with Google to incorporate its search engine into its mobile internet application.

In addition, T-Mobile also announced that it will continue to work with Google on its mobile operating system, Android, and will be offering its customers the first “Gphone” towards the end of the year. This is Google’s attempt to open up the market as it will make independent software development for mobiles a reality and allow better and faster innovation. This, in theory, will allow mobile manufacturers and mobile operators the freedom and ability to design products. Vodafone, however, has taken the risky decision of opting out of the Gphone so far as it fears that it could be Google’s way in to controlling the mobile market.

Another major theme of the Congress has been the unveiling of the challengers to the iPhone by the handset manufacturers. Samsung, LG and SonyEricsson have all announced new touch screen phones. Nokia has announced that it has plans for a touch screen phone in the pipeline but wants to avoid the “me-too” attitude that became pervasive in the MP3 player market that led to clunky, “gimmicky” design such as the touch pad on the appalling Creative Zen Player.  

The development of a genuine competitor to the iPhone has many sub-plots with the battleground for an iTunes rival being played out in the mobile industry. Nokia plan to incorporate a ‘Comes With Music’ feature whereby users can download unlimited free music tracks from the Nokia store for a year, and then keep them beyond this. LG, in partnership with Omnifone (a subsidiary of Vodafone) as announced a similar product, the MusicStationMax. So far, only the Universal Music Group has signed up to both of these products.

It will also be interesting to see how the operating system battle pans out here. Nokia will most likely develop its own, SonyEricsson is using the Windows Mobile OS and Google’s operating system, Android, will surely play a major part in competing with the iPhone. The development of a dominant operating system appears to be where the big bucks will eventually be for the various players involved in the mobile internet revolution. It must be said that Google’s promise of “open” mobile internet seems like the most promising option at this stage.