On-Device Portals: The next step beyond WAP in data service mone

Next stage beyond WAP:

On-Device Portals: The next step beyond WAP in data service monetisation

ARCchart
Market Study December 2005

Table of Contents

Executive Summary

The mobile phone industry is witnessing the adoption of On-Device Portals (ODPs), a new generation of

products which deliver content on the mobile phone through the use of a client application. We segment ODPs

into three classes of products - offline portals, on-device store-fronts and home-screen replacements. Ondevice

portals are an evolution of WAP, as they leverage the handset’s capabilities to deliver a more

appealing user experience, increase service awareness and streamline content purchasing.

On-device portals have emerged to address the poor take-up of mobile data services. Operators have spent

tens of billions of dollars on 3G licenses and infrastructure, and are now investing in HSDPA network

upgrades and in sourcing content from media brands. However, we find that non-messaging data revenue is

still very low: for a successful operator like Vodafone UK, the increase in pure data revenue generated

between 2004 and 2005 is estimated at just $88 million.

Clearly, the answer is not in bigger pipes or more content - content may be king, but the user experience is

queen. While operators have made substantial investments in their content strategies, the user experience

has been neglected. It can be said that we are at the stage of the ‘abandoned shopping cart’ syndrome that

was prevalent in the early days of the web.

ODPs cater directly to the needs of the major industry players involved in the distribution of content to mobile

handsets – namely the operators, handset manufacturers and media companies. For mobile operators, ODPs

have the potential to drive data ARPU uplift and service usability by delivering content to the device in an

easily discoverable, instantly accessible and personalised manner, and by providing the ‘wow’ factor through

the use of rich graphics and smarter content. For content providers, ODPs are able to deliver an immersive

user experience beyond the traditional off-portal channels. Finally, ODPs cater to handset manufacturers who

want to reduce their time-to-market for customised handsets.

This report analyses 14 vendors in the on-device portal space, namely Abaxia, Action Engine, Cibenix,

Handmark (Pocket Express), Macromedia (FlashCast), MSX, Nellymoser, Onskreen, Openwave, Opera

Platform, Qualcomm (uiOne), RefreshMobile, Silk and SurfKitchen. An in-depth overview is provided for each

vendor covering the vendor’s history, positioning, products, customers, technology and strategy, in addition to

presenting ARCchart’s viewpoint on the company. The report also draws a comparative landscape of ODP

vendors in terms of their positioning, customers, products and technology.

An extensive discussion of the current ODP market is presented. Following the technology trigger in 2001 and

the first wave of ODP vendors arriving in 2002, on-device portals have gained traction in 2005. In 2006, we

expect to witness a second wave of heavyweight vendors enter the market, while in 2007 we see the wide

acceptance of on-device services by the key industry players. Ultimately, however, we see the core

technology of current ODP solutions commoditising from 2008.

On-Device Portals

With more than one RFP for ODP products being announced each month globally, the market for on-device

portals is starting to boom. Spearheaded by European operators, ODP product deployments are expanding to

the major US operators and content providers, as well as seeing the first commercial deployments in the

Middle East, Asia and Australia. The report profiles the movements of the major operators within the ODP

space, such as Orange Download and Vodafone Live Cast, and presents case studies on product

deployments from O2, ONE, Telefónica and TIM. Efforts by device manufacturers to incorporate ODP features

into their handsets, such as Motorola’s Screen3 and Nokia’s Active Idle and Preminet Client, are examined

and an insight into ODP deployments by content providers is provided. The report also investigates

developments within the various standards bodies – namely the OMA, the OMTP and the W3C – and their

likely impact to the ODP market and on the evolution of ODP technology.

Having completed the initial phase of product innovation, the challenge for ODP vendors is now on execution

and partnering in order to establish market share and develop a fuller product specification.

Based on interviews with 35 ODP vendors, operators and other players, the report identifies 10 trends which

we see unfolding within the ODP market from 2006 onwards. We see third-party software platforms becoming

an important route to market: not necessarily platforms like Java or super-browsers, but application

environments, such as those from Openwave, Access, Obigo and Macromedia (Flash Lite), all of which are

profiled in detail. We see the server becoming a core part of the ODP value proposition, offering features such

as content and, client and user management. Other market trends discussed include the increasing

importance of synchronisation, service discovery and search, personalisation (both implicit and explicit) and

the SIM as high-value areas in on-device portal services. The report also casts an eye on the future of unique,

mass-produced experiences, where we see ODP functionality combine more intimately with the handset user

interface.

The report presents a forecast for growth in the ODP market over the next four years, up until 2009. We

estimate that the ODP market in 2005 stood at $30 million, but will grow aggressively over time to reach $1.4

billion by 2009, corresponding to 1.1 billion ODP licenses sold for that period. We believe that tier-1 and tier-2

mobile operators will initially lead the way in ODP client deployments but, by 2009, content providers will be

responsible for most client deployments. We believe that a second wave of heavyweight ODP vendors will

arrive over the next 12 months and the report profiles an anonymous server infrastructure vendor that is

planning an entrance in 1H06.

The report concludes with actionable recommendations for ODP vendors, as well as forward-looking operators,

manufacturers and content providers.

On-Device Portals

For full details, please email michellen@cmsinfo.com

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