Do Wireless Numbers Really Add Up?
teledotcom.com
by Brian McDonough
MBizCentral
03/02/01, 1:38 p.m. ET
OAKLAND, Calif.-If it seems like
there's more analysis than action in the
wireless space, you're not alone in
noticing it. Research firm EMarketer has
been analyzing the analysts and
concludes that the industry is crowded
with smoke, mirrors, and random
mathematics.
?Researchers are pulling their numbers
out of thin air based on hot air,? said Paul
Mulligan, wireless analyst for EMarketer.
?We once looked suspiciously at Internet
usage projections, but at least those
projections began from a basis of Internet
usage at that time.?
Today, researchers are projecting usage
for things that don't even exist yet,
including 3G, Mulligan said: ?They might
as well be telling us how many people will
drive wheel-less cars in 2007.?
While EMarketer concludes that it's
actually impossible to pinpoint an exact
number of wireless users in the United
States, Mulligan's report found more than 100 research
organizations and consultant groups ready to serve up
numbers.
The EMarketer report points to a number of examples of
mismatched wireless predictions. Ovum predicts there will be
37.5 million wireless Internet users in North America by
2003, while IDC projects 73.1 million in the United States
alone.
Looking to the analysts to predict global m-commerce
revenues? If you're bullish, go with Ovum-it predicts $139.37
billion annually by 2005. If you're more conservative, Jupiter
has a number for you: $22.2 billion in 2005.
In the financial-services sector, Celent Communications
predicts that 150 million people will use global wireless
financial services by 2004, compared with 10 million in 2000.
ARC Group forecasts that the number of wireless-banking
users will grow to 331 million by 2004, more than double the
Celent projection.
?When you compile statistics for a living, it's quite amazing to
see all these variances,? Mulligan said. ?[These numbers] have
no basis.?
Sometimes the variances are due to the different ways analysts
carve up the wireless market. A given projection may be only
B-to-B, B-to-C, or B-to-C with some components of
B-to-B. Mulligan warns to beware of analysts who don't
disclose their methodologies.
?That means their methodology may be to pull the number
out of the air,? he said, adding that's all they can do when
projecting five years into the future about the markets for
technology that isn't even available yet.
He also observes that outside forces may shape analysts'
viewpoints. First, their audiences are interested in making
money in wireless, so they want to hear upbeat figures.
Secondly, industry-wide optimism is lucrative for many
research outfits.
?You look at what a lot of them really do for a living, they're
consultants,? he said. Promoting the promise of a new
medium can also promote their own high-priced services:
?They're really saying, 'And you should hire us to take care of
this for you.' ?
So where should the prudent wireless businessperson look for
advice on the market's future?
?That's a good question,? Mulligan admits. ?It has to be based
on smart intuition. Certainly there's a market out there, but
it's kind of hard to say how large it is. We've seen glimpses
with i-mode, but that's mostly e-mail and games. They've
essentially turned their mobile phones into GameBoys.
?What we have right now is the novelty factor of it.?
He also suggests that mobility and portability aren't the same.
Portable devices, ranging in size up to laptops, provide great
data access, but require concentration levels for data entry
that render even the smaller devices not very mobile, whereas
voice applications are truly mobile because there is little or no
distracting data entry.
?The more concentration, the less mobility,? he said.
While avoiding that one-dimensional definition of ?mobile,?
one should also beware of misleading conclusions, Mulligan
said. He notes that handset sales are often used to project
growth of data services, yet the connection is hardly certain.
?I have a cell phone, but I don't have it for data services-I
have it for voice. I think a lot of people out there just have it
for voice.?
It's not just the analysts whose ?really wild guesses? about
voice, data, and everything wireless must be subjected to heavy
scrutiny and doses of common sense, he cautioned.
?The first thing people should do is stop listening to the
mobile operators,? he warned. ?It seems to be unavoidable
that the firms with really good engineers seem to hire really
bad marketers.?
In the end, there's no crystal ball, the report would seem to
say. Wireless executives will have to inch forward into a dimly
lit future, reacting to opportunities as they arise, just like
everyone else. |
