Thoughts on Mobile World Congress 2009

In reviewing the announcements and activities of this year's Mobile World Congress in Barcelona, I have to say the event was much more optimistic than one may expect given the current economic environment. Though Monday and Thursday seemed slower than previous years, the usual buzz was present during the core of the conference, ie, Tuesday and Wednesday. Reasons for this positive vibe included not only continuing growth in the mobile sector, but also the recognition that handset manufacturers and portals were finally listening to their customers and therefore making their products both easier to use, as well as incorporating functionality popular today, such as social networks, rather than features which are still a long way from becoming mainstream, i.e. mobile TV.

As evidence of continuing growth in the sector, messaging and mobile advertising are clearly two bright spots. Messaging (incl. SMS, IM, and email) seems to only be expanding. Not only have the handset manufactures made more smartphones and email-capable handsets, but the tight integration of social networks within phones, portals and applications, will maintain a healthy increase of this communication medium. (MMS is the exception here, as wider use of mobile email, which can send large photos, and photo upload/download applications, enable customers to manage mobile photos much easier, and at a lower cost, than MMS).

Though it will still be a few more years before mobile advertising truly becomes mainstream, optimism in this area continues apace. The greater landscape for serving ads can be seen as both positive and negative. I.e., the larger number of spots leads to lower CPMs; however, more mainstream companies are trying mobile advertising (in the form of banners in applications and mobile internet sites, SMS, mobile email, etc.) and new technology is also enabling the advertising to become more relevant to the users. True, some companies in this space are either struggling or closing, but others are quickly filling their vacant spots with improved technology and marketing prowess.

This ability to better target advertising ties closely to the tighter integration of the social networks. The more operators, portals and services know about their customers, the more relevant ads they can serve to them, and the greater positive impact on revenues for all along the value chain. Thus the reason handset manufacturers such as INQ and Palm, and portals such as Yahoo! have created such excitement here this year. New products and designs are making it easier than ever for their homepages/entry pages to become not only the gateway, but also the central communication hub, while simultaneously enabling these companies to learn more about their customers mobile habits.

In summary, while it is obvious the mobile sector as a whole will not continue to see the growth of previous years, there is also clearly enough excitement and innovation in this space to maintain the momentum to both solve the known (and unknown) issues. Needless to say, it is refreshing to see companies finally begin listening more and more to customer demands and preferences related to their use of the mobile phone, while at the same time strengthening their own bottom lines.