Ready or not, the era of the mobile Web is upon us.
Fueled by the success of Apple Inc.’s iPhone – and new competitors like Motorola Inc.’s Droid and Palm Inc.’s Pre – the number of people accessing the Internet using a cell phone or other portable gadget is growing “explosively,” according to Mary Meeker, an influential technology analyst at Morgan Stanley.
About 57 million people have bought an iPhone or its phone-less cousin, the iPod Touch, since they went on sale in 2007. To put that number in perspective, the two pioneers of the PC-based Internet, AOL and Netscape Navigator, had eight and five times fewer users respectively after the same amount of time on the market, Meeker said.
People are underestimating how big the mobile Web will be in the coming years, Meeker argued in her annual presentation to the Web 2.0 Summit in San Francisco in October. Already, she said, it is “driving unprecedented change in communications and commerce.”
For the slumping cell-phone industry, advanced gadgets are a lone bright spot. Sales of smartphones worldwide rose 27 percent in the second quarter, while total sales of mobile handsets declined 6 percent, according to research firm Gartner Inc.
“The mobile Web just cannot be ignored at this point,” said Jack Templin, a consultant and entrepreneur who heads RI Nexus, the R.I. Economic Development Corporation’s program for the information technology and digital-media sector, which recently held a panel discussion on the future of the mobile Web.
The technology’s profit potential was underlined on Nov. 9, when Google Inc. agreed to pay $750 million for three-year-old AdMob Inc. and its mobile-advertising network. The purchase immediately turned Google into the biggest player in mobile ads.
“Our mobile revenue is growing faster than our regular revenue,” Google CEO Eric Schmidt told Bloomberg News. “All the signs indicate a great success in this space.”
In some ways, the mobile Web’s emergence presents a headache for existing businesses, which now must figure out how – or whether – to deal with yet another new technology.
Annette Tonti, the chief executive of Providence-based, mobile-software startup MoFuse Inc., said she sees the challenge firsthand near her home on Aquidneck Island. Restaurants in Jamestown and inns in Newport are skeptical about whether they need to invest time and money in a mobile Web presence.
“It’s very much like it was in 1995, 1996, 1997, when a restaurant was saying, ‘Why do I need a Web site?’ ” Tonti said in an interview. “And now they’re saying, ‘I can’t even imagine not having a Web site.’ ”
On top of that, many of the owners who talk to Tonti figure that since the iPhone can load standard Web sites, their regular ones will do fine. “But it probably loads in 30 seconds or more,” she said. “Thirty seconds maybe doesn’t sound like a lot, but it’s a lot when you’re standing there waiting for something to load.”
Until smartphones came along, most cell phones were “feature phones,” which offered basic extras like e-mail along with calls and text messaging, North Kingstown’s Brian Jepson, a book editor at tech publisher O’Reilly Media Inc., said at the RI Nexus event. Phones such as the iPhone and the Droid are really “a pocket computer,” he said. “You can now spend a really big chunk of your day on your phone, versus your laptop.”
Although Jepson hesitated to give all the credit to the iPhone, he acknowledged that the Apple device “just crushes everything so far” because it makes it easy to browse the Web or perform other tasks using one of the 100,000 third-party applications created for it.
Google’s Android operating system – which is used by the Droid but is not tied to a single device – is having the same effect, as demonstrated in statistics cited by Meeker. She said the iPhone makes up just 11 percent of global cell phone sales but 65 percent of all Web page views from a mobile phone. Similarly, Android phones account for 2 percent of sales but 8 percent of page views.
However, Apple’s and Google’s are just two of the vast number of platforms that run cell phones around the world. Jonathan Stark, a tech consultant in Providence, thinks the industry is badly in need of standardization. “It’s not feasible to write [applications] for all these different platforms,” he said.
What may happen, Stark suggests, is that as one platform becomes dominant – possibly Safari, Apple’s Web browser for both desktops and the iPhone – it will gradually develop into an industry standard.
As Google’s purchase of AdMob showed, mobile advertising is forecast to grow exponentially. The research firm eMarketer Inc. projects U.S. mobile-ad spending will rise from $416 million this year to nearly $1.6 billion by 2013.
“We’re still very early for mobile advertising,” Tonti said. She expects companies will use it to augment marketing campaigns that also run in other media.
Mobile phones also offer the potential for location-based advertising – say, Starbucks offering you a coupon as you walk by one of its stores. Tonti described geographically targeted ads as “the holy grail,” but warned it may run into privacy concerns.
Others are creating software. Joel Evans founded East Greenwich-based Cronk Software Inc. last year to develop applications for the iPhone and other mobile devices, and his company has created programs for Oregon’s state lottery, the Rhode Island International Film Festival and other organizations.
Plenty of questions remain about how the mobile Web will develop, particularly when it comes to the future of carriers like AT&T Inc. and Verizon Wireless.
AT&T’s network has been pilloried as slow and unreliable, as iPhone subscribers’ increased usage has strained it. According to Meeker, data traffic on AT&T’s network has soared nearly 5,000 percent since Apple’s device was introduced.
In Rhode Island, the competition for cell phone subscribers is set to grow. Cox Communications Inc. has announced plans to roll out its own cell phone network to compete with Verizon, AT&T and the other existing carriers.
Cell phones will not be the only devices used to access the mobile Web, either. E-book gadgets such as Amazon.com Inc.’s Kindle and Barnes & Noble Inc.’s Nook offer unlimited data for the life of the device, although their Web-browsing capabilities remain limited. (The companies, rather than the customer, pay the service provider.) Apple is also rumored to be working on a new tablet device that would be bigger than an iPhone but smaller than a laptop. •
