Dramatic Growth in Store for Multimedia Handsets, but Consumers Still Not Enthused About Multimedia Options

In-Stat: The number of cellular phones with multimedia capability will double in the next two years, but this capability is still not generating much consumer enthusiasm, especially in the US,. In spite of the phenomenal growth of dedicated MP3 players during 2005, user interest in having this capability within their wireless phone did not change over the same period. The ability to play digital music on a handset was one of the more popular multimedia applications cited by respondents in a survey of US consumers; but with just 9% expressing any interest, it is really not a compelling feature to many. Subscribers in some global markets will slowly and grudgingly adopt the limitations of the current wireless multimedia marketplace, while other markets will mirror the Japanese market where not having multimedia capability in a mobile device is the exception. Wider adoption of multimedia could come from giving users a taste of the service. In spite of the tepid interest by consumers, the number of phones with multimedia capability will grow dramatically because of other business factors.

• The greatest interest for multimedia viewing in the In-Stat US consumer survey was for receiving real-time news, weather, sports, and financial information.

• Those willing to consider paying for such services would pay an extra $20 for the phone, but believed that $15 monthly was too much to pay for service delivery.

• In 2003 and in 2004, unit sales for MP3-capable phones have exceeded dedicated MP3 player sales. That changed in 2005 when global MP3 player shipments outpaced phones with MP3 capability by nearly 2 to 1.

Multimedia Handsets: Exciting Capabilities Meet Dull Customer Demand

Publ 20060410