Mobile network operators, keen to raise data consumption levels, are increasingly offering heavily subsidised mobile computers to subscribers, either as a stand-alone proposition or as part of a ‘bundle’ of features alongside a standard mobile telephony service.
This trend isn’t new, by any means, particularly in Europe, but it’s interesting to hear rumours that Verizon Wireless of the US is gearing up to sell netbooks to its mobile customers. Given that the operator is committing itself to building a next-generation network using mobile computing-friendly LTE technology by 2010, this seems a laudable goal.
It’s an obvious move on the operators’ part, particularly in mature markets where the strongest growth potential no longer lies with signing up virgin customers. So, we’re also seeing Vodafone pally up with Twitter, for example.
However, billshock is still a major obstacle to growth in data consumption and operators will need to change their pricing regimes to foster greater interest in data service usage. But, by doing so, they’re cutting their margins further still and the gains from increased consumption may not be enough to offset the loss-leading initiatives in device subsidisation.
The use of netbooks is particularly attractive because of the low cost of the devices and because the Internet-centric nature of the computers lends itself very well to the popularity of mobile social networking and other data-intensive applications and services.
I recently surveyed the mobile computing space as part of my research for Juniper’s new report on the Mobile Enterprise sector. The overall market for netbooks (consumer and enterprise usage) grew from virtually nothing in 2007 to around 11 million units in 2008, according to industry sources. I’m expecting very strong growth in 2009, despite - or perhaps because of - the recession. As a result, netbook shipments in 2009 will account for nearly 14% of the mobile PC market.
In time, though, I expect demand for netbooks will tail off - as users switch to more advanced smartphones and as the market becomes aware of the computing limitations of netbooks - though upward growth will be assured.
So, should operators be hedging their bets by relying on both smartphones and mobile computers? Or should they focus squarely on the rapidly-evolving smartphone instead? There isn’t a right or wrong answer, I think. But if anyone wants to comment, I’d be interested to hear it.
Tags: billshock, bundles, Europe, laptops, LTE, mobile, mobile applications, mobile broadband, mobile computers, mobile computing, mobile data, mobile devices, mobile enterprise, mobile handsets, mobile internet, mobile network, mobile social networking, mobile telephony, netbook shipments, netbooks, North America, notebook computers, operators, recession, smartphones, Twitter, US, Verizon Wireless, Vodafone