Photo Messaging to Boost Revenues

The arrival of camera handsets and consumer familiarity with digital photo sharing will result in significant revenue opportunities for wireless operators and handset manufacturers according to a new report from The Zelos Group. The report reveals that the market for mobile originated photo transmissions will grow from US$10.3 Million today to over US$440 Million in 2008.

"The utility of imaging is immediately obvious to a substantial portion of mobile subscribers," said Seamus McAteer, senior analyst, Zelos Group and author of the report. "Consumers will use images captured with camera handsets as a way to add visual context to communications, versus using them for a long-term memorial record."

McAteer said that camera phones will not replace the need for digital cameras. Instead, they will be primarily used to provide a picture of a social situation, and collaborate with friends (i.e. while shopping) via email or to create mobile Blogs, like a celebrity-spotting Web community. However, a market will eventually emerge for high-end digital camera phones, that feature higher resolution imaging components, more advanced color displays, higher quality optics and flashes. Zelos expects these handsets will not arrive in the US in volume for 18 months, and that imaging components that rival stand-alone digital cameras will not be available in the US until 2005.

"This is still a nascent market," commented McAteer. "Only four percent of mobile subscribers will have camera-enabled handsets by the end of year, and they will send about two mobile originated photos per month, on average."

The low installed base of handsets that support the MMS (Multimedia Messaging Service) and a lack of inter-connectivity between MMS infrastructure deployed by various carriers will not stymie the evolution of the market for photo messaging. Carriers and consumers will make use of Internet services such as shared online photo albums and email. Zelos Group expects that direct peered connectivity between handsets on the major networks in the US will become a reality in 2005.

The growth of the market will be fueled by increased options for camera handsets, as well as a shift in operator pricing schemes. According to its findings, Zelos Group said the price structure will evolve to a per-message price, like SMS messages are billed.

"Photo messaging will be an important incremental source of revenue for mobile carriers and will account for about 2% of average revenue per active user in 2008," said McAteer. "The proliferation of handsets that support multimedia messaging will also provide another target for delivery of interactive media such as interactive horoscopes, and short animations that will satiate the mobile users desire for diversionary entertainment."

Posted to the site on 19th August 2003