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Ringtone Market Success Illustrates Value of Standardized Service Delivery Layer

Product Type: Market Research Report
Published by: Yankee Group
Published: January 2008
Product Code: R388-2521
Description
To replicate success of SMS or ringtone services, mobile service providers must embrace a thin open service delivery architecture.

The mobile industry can’t stand in the way of progress. During the last year, many companies in the mobile ecosystem, including Sprint, Hutchison Whampoa, Verizon Wireless and T-Mobile, have announced initiatives to embrace the unstoppable trend toward openness in the mobile world that will drive service usage and stimulate innovation. Openness in the context of this note refers to opening up mobile networks and devices to third parties (including web companies and application/content providers) to create a more vibrant ecosystem of mobile services than service providers have been able to cultivate in the traditional closed mobile ecosystem.

Yet, service providers and their vendors are struggling to implement a strategy that will both enable them to embrace openness while still adding value to and maintaining the differentiation of a mobile service. They will need to make some sound decisions on the technologies they can leverage to fulfill and differentiate their openness strategies. Their conflict is in large part because service providers do not want to lose control of their direct relationship with the customer and be eclipsed by other companies, which can use the open environment to insert themselves in the value chain between the customer and the service provider.

This situation is not new for mobile service providers. We argue that mobile service providers navigated an early version of the openness challenges with the introduction of ringtone services . Mobile service providers must apply lessons learned in providing ringtones to grow revenue from the mobile services pie.
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