Mobile data revolution shakes up distribution and retail channels

Informa: The mobile industry has been moving away from a vertically integrated model controlled by operators and manufacturers, to a more complex horizontal, layered structure, creating new challenges and opportunities for distributors and retailers of cellular phones and data services.

The third edition of , released in March 2006 predicts that content and applications developers will be increasingly influential as the mobile retail distribution structure becomes more complex. New retail channels are being developed, with the direct channels, such as websites and on-net delivery to mobile users, growing in importance.

The trend away from hardware toward data services has implications for distributors and retailers. Until recently, the mobile distribution value chain focused mainly on hardware products, such as handsets, accessories and prepaid top-up cards but has now begun to include content services. At least initially, the rise of content will mainly be made possible through the emerging direct channels, as opposed to traditional bricks-and-mortar retail outlets.

Content and service providers are moving into the market with digital products, such as games and ringtones, and operators are beginning to develop new routes to the end user, all of which is developing the direct channel. As well as specialist direct channel players, direct services are frequently offered as part of the retail operations of companies across most mobile retail sectors.

The report includes extensive, unique forecasts to 2010 of revenue trends, in total, by distribution sector, by hardware vs services and by region. The forecasts show that direct channels accounted for less than one-quarter of all retail sales in 2005, but by 2010 they will take 42% of retail sales.

The global mobile retail market was worth about US$126 billion in 2005, almost US$106 billion was for handset retail sales (excluding wholesale) with US$20 billion in mobile data retail sales (excluding P2P messaging and prepaid top-up). Between 2005 and 2010, mobile data retail sales are set to grow by about 130% to US$47 billion, increasing to 42% of the total retail revenues, while hardware sales will drop by 19% to US$86 billion. Mobile Distribution and Retail

Publ 20060313