Mobile-Phone Premium Content Market to Reach $40 Billion by 2010

The global market for mobile-phone premium content, including music, gaming and video, is expected to expand to more than $43 billion by 2010, rising at a compound annual growth rate of 42.5 percent from $5.2 billion in 2004, iSuppli Corp. predicts.

"After years of hyper growth, mobile-phone markets in several major regions around the world are maturing, resulting in slower subscriber growth and declining Average Revenue Per User (ARPU) for wireless communications carriers," said Mark Kirstein, vice president of multimedia services and content for iSuppli. "Meanwhile, new 3G networks offer increased bandwidth, but require compelling applications and content to drive revenue and provide a return on investment to operators. Against this backdrop, mobile-service carriers and content providers are establishing new business models to capture the growing opportunity."

Mobile music, led by ringtones and ringtunes, represents the largest and fastest-moving premium-content segment in the wireless world, according to Kirstein. The market in 2005 grew rapidly over the $3.8 billion revenue mark achieved in 2004, as the industry made a major transition from traditional polyphonic ringtones to ringtunes.

Meanwhile, revenue from mobile gaming increased by about 80 percent in 2005. The mobile gaming market is growing beyond its fledgling roots as game quality improves and titles proliferate. The major video gaming companies, including Electronic Arts and THQ, have reorganized themselves to focus on the growing opportunity.

Mobile video offers perhaps the most significant long-term opportunity in the mobile-content market, Kirstein added. However, the market for mobile video is still at the nascent stage, even in Asia.

In contrast, the markets for mobile music and gaming already are flourishing on the back of media-enabled installed phones. For example, the total of nearly 400 million installed phones with music codecs has established an existing capability for music.

However, mobile TV will depend entirely on new phone deployments. Even with reasonably strong adoption of mobile-TV technology and subscribers, the installed base of TV-capable phones will only represent 12 percent of the total by 2010."

Posted to the site on 8th March 2006