Mobile Portal Market Structure

Mobile portals represent an increasingly popular business strategy with many companies moving quickly to secure a place in the market. Take, for instance, cellular operators such as Vodafone who can no longer rely on voice services alone to grow revenues and market share. As a result, they are developing value-added services (VAS) to generate new revenue streams, reduce churn, and differentiate their businesses from their competitors. In mature mobile markets such as Finland, with 64 percent penetration, there is a real need to differentiate with VAS in order to sustain and grow the business. The new breed of VAS that operators are turning to is mobile portals. And they are not the only ones: Content providers, fixed Internet portals, hardware developers, and start-ups are all developing mobile portal strategies. All these firms are fighting for customer control.

To clearly understand the positioning of various players in the marketplace, it is necessary to look at the differences in approach, applications, technology, market development scenarios, and business models. As Figure 1 illustrates, there are four main types of new portals in the market - 1) wireless operator portals, 2) multi-purpose web portals, 3) commerce portals, and 4) pure-play portals. Each type possesses unique advantages for gaining primary ownership of the electronic relationship with consumers, and each type has its own strengths and weaknesses.

Figure 1: Structure of the Mobile Portal Market

For example, mobile cellular operators, such as NTT, Sprint PCS, and Vodafone, already have an existing service relationship with mobile users. They can analyze customer billing and support data to learn valuable information about their customers' preferences, sites they frequent, and other specific profiling information. However, cellular firms do not typically have the Internet skills and experience necessary to develop user-friendly portals. Web portal developers have such skill and experience in abundance. On the other hand, although web portals such as AOL, Yahoo!, and MSN have an established customer base and a network of content providers, they will face significant challenges adapting their business model to the mobile marketplace.

M-commerce portals, such as eBay, share the advantage of being able to port their existing business model from the web to the mobile device. As a result, these firms may have a head start in the actual generation of revenues from the mobile portal channel. Some portals may choose to stay within the consumer arena but focus on a niche market. Start-up companies, such as Tellme, Yodlee, BeVocal, and Webraska (recently merged with AirFlash), since they focus solely on the mobile portal business, are more technologically advanced. However, these start-ups lack the important brand and content alliances of the major Web portals and may therefore be susceptible to cash-flow difficulties.

Choosing the right strategy, right value-added services, and right partners becomes extremely critical for companies hoping to survive in this relatively new industry. We realize this is easier said than done, and we provide answers to these questions in the related articles "Revenue Enablers: Elements of a Wireless Portal" and "Portal Revenue Models."