GSMA Mobile World Congress: Another View

By Bill Jones

Last year more mobile phones were sold globally than the aggregate sales of TVs, PCs, and cars put together. There are approximately 4 billion mobile phones in a world of more than 6.5 billion people. Penetration rates in some European countries are 150% (Italy), while some are as low as 80% (France being one). Industry analysts are forecasting approx 40 billion mobile connections in an “internet of things” which will connect, white, brown, black, utility, automotive goods / products, and so on, but they don’t know how or when. Nonetheless it reaches deep into the home and consumer markets. Content in one form or another will play an increasing part.

It is a consumer market.

The mobile world is characterised by the tension between operators and handset manufacturers as to who controls the customer. Handset vendors view operators as a pipe to carry content; operators view handset manufacturers as a means to connect customers. It’s a very uneasy yet symbiotic relationship where progress by one is rarely possible without the support of the other. Making it all work together is a challenge. It is also characterised by the convergence between mobility and computing, both of which are consumer plays.

The GSMA Mobile World Congress is changing. This year it had fewer attendees and fewer exhibitors, and this was not due merely to the economic activity. Operators were less in evidence, having withdrawn from major exhibits and hospitality suites, partially anticipating lower attendance and partially due to economic pressures placed upon them by regulators to drive down prices. There’s nothing there for them other than networking opportunities and talking with vendors – and these days, why wait to do that once a year?

Infrastructure vendors have merged, amalgamated, or exited the business, so they were also less in evidence. What was in evidence was an increasing array of Pacific Rim and Chinese vendors, which are arguably less culturally attuned to intellectual property and rights management. The buzz in the show was around new handset models, new features, and new content offerings – that is, new plays for consumers. Yet too many handset vendors are posting red ink in a game that is heavily dependent upon market share. Profitability is highly sensitive to market share and they will do nothing to damage that.

So, GSMA vectors have moved away from infrastructure and operators to a more consumer flavor.

And while GSMA is international, the US – where DRM started – operates to a differing mobile standard and architecture from Europe.

DRM is a topic which raises high emotions amongst consumers. For many at Mobile World Congress, it’s a utility. As a handset vendor, are you going to promote DRM or announce it if it has possible negative connotations which can damage market share? In private conversations with participants, many vendors spoke of having implemented DRM and supporting all the latest standards, particularly with increasing content and monetization offerings. Yet none was going to issue a major announcement at this time, preferring to soft-launch new features that would not attract attention and that could be tested in a softer market with less capital commitments.

And since DRM vendors are dependant upon OEM vendors, they are not going to make announcements that could irritate their customers.

We know from our work with the mobile universe that DRM is here to stay. The groundwork is being laid for continued penetration of DRM, and this was acknowledged in private conversations in Barcelona.

Bill Jones is CEO of Global Village Ltd.

One comment

  1. nkchang · ·

    I believe DRM will stay long live, but you will also see side loading – no matter from PC to mobile device or from PC to storage media, also happen at the same time – with DRM(MTP+WMDRM) or without DRM.

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