New handsets highlight multimedia services.
The other part of the equation is getting people to use MMS.

With devices like the Apple iPhone through AT&T, the LG Voyager from Verizon Wireless, the HTC Touch through Sprint and the Shadow from T-Mobile USA, this holiday season promises to be the biggest one yet for multimedia phones.

Specific, well-marketed devices are one way to help push usage of multimedia messaging services (MMS). MMS revenues are on the rise – 2.6 billion MMS messages were sent in the first half of 2007, almost as many as were sent in the entire year of 2006, according to the CTIA. But that number still pales in comparison to the 28.8 billion text messages sent in the month of June alone. That’s why content, technology and other companies are still beating the drum about ways to improve MMS uptake.

Easily detectable icons within categories can aid video uptake.

Factors such as wider distribution of cameraphones, nationwide operator interoperability, the inclusion of MMS in data price plan bundles and a younger generation of users all help drive usage. “It’s growing,” with the MMS adoption rate mimicking what initially happened with SMS, says Chirag Bakshi, vice president of messaging and content at VeriSign.

Still, a lot of people don’t know how to use multimedia services on their phones, so companies like Unwired Nation are stepping up with voice services. “It’s complementary to MMS and all the data services, but voice reaches everyone,” says Stacey Zuniga, a co-founder and product strategist at Unwired Nation. The company, formerly Unwired Buyer, initially was focused on an eBay application for notifying people about bid deadlines but expanded that to include a free, ad-supported service for any kind of publisher, ranging from news to social networks.

CELLTOP ON TAP
Voice services are one way to approach the problem. Another technique to drive content discovery is Alltel Wireless’ Celltop, which is designed to mimic the capabilities of a desktop PC with easy access and control of content. “Cells” are devoted to certain types of content and positioned vertically on the screen.

Celltop is now on 10 devices through Alltel and will be on every Alltel device going forward, according to Scott Moody, director of multimedia content at Alltel. Alltel launched the widget-based environment in January and now offers more than 20 cells, with plans to reach 50 by the end of the year.

It wasn’t that Alltel didn’t have good content. It was just that customers couldn’t find it or they weren’t willing to invest the time needed to find it. “We made a bet when we started working on Celltop” that a better discovery environment would help, Moody says. It’s still early, but the results are encouraging. Almost half the people who have a Celltop device have used it at least once, and the carrier is seeing a lift in ARPU from devices where customers have accessed Celltop at least once versus devices on which customers have not accessed Celltop.

Unwired Nation provides voice services to help with MMS.

Celltop is exclusive to Alltel, but the carrier is working to potentially distribute it on a broader basis, such as through a licensing deal, according to Moody.

A number of partners were involved in the creation of Celltop, including frog design. It’s based on Qualcomm’s BREW uiOne platform. Alltel initially launched with content via Motricity but expanded that to include developers such as QuickPlay Media, 9 Squared, Funmobility and others.

When Alltel first put together the Celltop program, it was told that it wouldn’t be able to do video, but engineers figured out a way to do it, Moody says. Earlier this month, Alltel launched its first video service through Celltop, which is separate from its Axcess TV streaming video service, a MobiTV product.

QuickPlay built different cells for market niches, including extreme sports, horoscopes, wellness and entertainment. “In general, the company’s approach is to lower the barrier to entry for mobile video” for content publishers and ultimately users, says Mark Hyland, vice president of marketing at QuickPlay.

As expected, watching mobile video is really a snacking experience, where people watch a few minutes here and there – waiting in line, on the bus or in between things, much like someone might use a BlackBerry to turn five minutes of wait time into productive time.

Price is always a consideration as well in terms of multimedia content adoption, and like many others, QuickPlay is working on an ad-supported model. The adoption of 3G is closely tied to the use of mobile video, too, and that’s slowly increasing. Every month, more people are signing up for mobile video, Hyland notes.

Right now, music is at a stage where it’s capable of reaching a broader, mass audience, so it’s not surprising to see so many handsets featuring music. Mobile video/TV will have its day – the evidence being month-to-month uptick in usage. “I think the capabilities are there, and the interest is there,” Hyland says. After all, the iPhone and its touchscreen counterparts are well-suited for watching video.

BEYOND MMS
Along the same lines as Celltop, other companies are coming up with ways to attack that oft-cited lack-of-discovery problem. Skyward Mobile basically wants to supplant MMS and deliver all kinds of experiences within one application, so consumers don’t have to jump around on their phones to find chat sessions, video or games. It’s similar to what companies like UI Evolution and Surf Kitchen are doing, but Skyward considers itself in the same category as Yahoo!, Google or AOL.

“I don’t know whether MMS is going to be a critical player in the long run in mobile,” says Skyward Mobile CEO Jeremy De Bonet, one of the founders of MobiTV. “It’s a good interim solution,” but in the long run, MMS may be replaced by other means of consuming or transporting media on phones.
For now, SMS is still king in terms of bringing in the data revenue. Alltel’s Moody probably best sums up the industry’s forecasts for music, video and more: “We’re looking for the growth to come,” he says.