SOURCE: eMarketer

September 12, 2006 09:00 ET

Non-Voice Mobile Spending to Grow to $37.5 Billion by 2010

Mobile Entertainment Will Be Major Revenue Driver, eMarketer Predicts

NEW YORK, NY -- (MARKET WIRE) -- September 12, 2006 -- Non-voice wireless services will give cell phone providers an edge in a competitive market saturated with voice services. Mobile phones have achieved mass adoption. eMarketer projects that by 2010, over 95% of the US population will have mobile phones.

Non-voice services such as messaging, music, gaming and headline news will not make much of an impact in the short term, but will make a huge difference by the end of the decade. By 2010, US mobile data revenues are expected to reach $37.5 billion up from $5.4 billion in 2006, according to eMarketer's new report, Mobile Spending: US Non-Voice Services.

Growth in US sales of non-voice wireless services is hindered by carriers' walled-garden approach to their offerings in which each carrier creates separate and mutually incompatible platforms for the sale and distribution of these services. In spite of similar offerings, each carrier has its own system for selling games, music and other applications. Marketers can best combat this constraint and offset the decline in voice revenue by segmenting their market and targeting those groups willing to spend more on particular applications, writes James Belcher, a senior analyst at eMarketer and author of the report.

Nevertheless, as non-voice wireless services become more popular, revenues from mobile entertainment, such as gaming, music, and video, will have the fastest growth rate of any non-voice category. "This projected growth makes a strong argument for focusing on mobile entertainment as a whole and on specific categories in particular, such as music," Mr. Belcher advises marketers.

According to two separate studies, mobile game revenues will reach $1.5 billion by 2008, and video revenues are expected to exceed $1.5 billion.

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