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Wireless Carriers Increasingly Bypassed for Content
Monday, April 14th, 2008 at 4:00 PM - by John Martellaro
Increasingly, wireless carriers are being bypassed for content, a sign that the providers are losing their grip on the industry, according to BusinessWeek. However, the carriers dont seem concerned and simply plan to make up for lost revenue by raising fees for access to that content. Meanwhile, smartphone content providers like Apple are cashing in.
Smartphones have created a generation of content hungry consumers, and more and more, they are bypassing their wireless carrries to obtain all kinds. Today, aout 80 percent of purchased content is from the wireless companys portals, such as ring tones, music, wallpaper, mobile games and video. However, David Kerr at Strategy Analytics has estimated that the number will fall to 25 percent in five years. Carriers are already starting to feel the downturn.
Despite that, the carriers say theyll make up for that lost revenue by charging more for wireless access that delivers that content.
"The content piece is not as meaningful for service providers as access," said Kevin Packingham, vice-president for product development at Sprint Nextel. "Thats whats really going to move the needle." As a result, the carriers are promoting their data plans.
Apple is one content provider thats cashing in on the trend -- in addition to the monthly revenue it receives from AT&T. However, Sony Ericsson and Nokia are also working on their content delivery services. Thats fine with the carriers, who are good at touting their network and charging fees but not so good at delivering the goods in the face of increased capabilities of smartphones and more sophisticated content.
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