Which Will Drive Wireless - Enterprise or Consumer

Which Will Drive Wireless: Enterprise or Consumer

March 7, 2003

by Derek Kerton

After the ill-received launch of WAP services and the general US and EU flop of the "wireless web", much has been said about the wisdom of targeting original services at consumers. By early 2001, the knee-jerk reaction of the industry was to quickly rally, re-aim the cannons of progress, and claim that "Our wireless company is now focused on the enterprise segment, please just ignore the fact that our name is e-WirelessFun.com."

This massive lemming-shift in focus started me thinking: Why are we abandoning consumer services in favor of enterprise services? Isn't moderation usually a sound strategy? Perhaps the industry will not be driven entirely by either side. The mobile phone is the main platform here, and it has strong installed base on both sides of the corporate firewall. In fact, I purport that either side can make huge mobile data penetration gains, just so long as the product and the service meet the needs of that target segment.

What are some of the two segment's needs in wireless applications?

Consumer:
Fun, bright color, high resolution, sounds, lots of content, fresh data, quality applications, low latency, decent speed, affordability

Enterprise:
Functionality, security, fresh data, quality applications, ROI

So did we meet consumer needs in the early days of WAP? Well, some niche apps like sports scores and stock quotes may have gotten some traction, but as an industry we failed to deliver, and the customer balked at our product like Rush Limbaugh at a tofu-burger. The industry over-promised and under delivered, and then to add to our mistakes, many companies and VCs concluded that there was no market with consumers. That's like the public refusing the XFL, therefore we conclude there is no market for football. Ridiculous!! The NFL is doing fine, just as is iMode. There is, and always was, a market, but the product offered just failed to meet its needs.

Let's look at a couple of examples, Japan and the US. One had highly functional, high-resolution, colorful handsets while the other had three lines of 24 characters in black-on-green. One country had a model to attract and stimulate content partners, and to allow the best content to bubble to the top of the menu, while the other country had carriers unwilling to share revenue and selling each top menu slot for additional revenue (no matter how bad the content). Now which country would you expect to be successful in the consumer space?

I suppose if the US consumer is to be eternally cursed with low-resolution screens, limited processors, high-latency data, dial-up delays, lowly beeps, and black on green, then we should target the enterprise. As it turns out, the enterprise doesn't need things to be pretty, they just need the right info at the right time to increase productivity. Therefore, I think the original push for wireless in the US should have been aimed at business, with consumer applications out there as pilot projects to test the waters.

The good news is: the US consumer will not be eternally cursed with lame terminals. At this stage of the game, it would be unwise to ignore the consumer opportunity. The US is on the verge of widespread deployment of 2.5G networks, color screens have finally made their appearance, and content providers have learned lessons both from mistakes made here, and successes made globally. As a consultant for Korea's SK Telecom, I have seen the future, and there's plenty in store to meet the needs of both enterprise and consumers. In Korea, much like Japan, we're seeing consumer uptake of advanced data services, and very promising new revenue streams.

Don't compound your mistakes. The consumer is out there waiting to loosen the purse strings for the right offering. The platforms required are falling into place this year, and I foresee growth around the corner. "If you build it, people will come."