Fortune Senior Editor David Kirkpatrick led a power-packed session at Davos this afternoon called The Future of Mobile Technology. Panelists included Google CEO Eric Schmidt, FCC Chairman Kevin Martin, Sony CEO Sir Howard Stringer, NBC Universal CEO Jeff Zucker, SK Telecom CEO Kim Shin-Bae and China Mobile CEO Wang Jianzhou.
Kirkpatrick attempted to steer the conversation towards asian growth in mobile (China Mobile dominates the Chinese market and is adding 6 million new mobile subscribers per month, SK Telecom dominates Korea with more than 50% market share) and the bleak prospects for mobile advertising revenue. He quoted Forrester as saying that the U.S. mobile advertising market is projected to be under $1 billion even as far ahead as 2012. Today, he said, only 3% of Internet advertisers are putting display ads on mobile devices.
Google Android And The Mobile Tipping Point
Schmidt played down the revenue estimate, saying the tipping point in mobile had not been reached. When it does in the next year or so, he said, those revenue projections will be very low. He said his goal with Google’s new Android platform is to help the market reach that tipping point, and make money from mobile advertising along the way.
Schmidt also argued that mobile devices are potentially more interesting than PCs, since they have or will have GPS and other features that will allow for new kinds of applications, as well as location-based advertising. The key, he said, is that new services will be on an open platform with open standards (Android, of course), and that the new 700MHz spectrum rules permit it (they do, mostly). That sets the stage, he said, for a “huge revolution” in mobile. Without it, we have closed network “islands.”
Asian Growth: Mobile Devices Becoming Extension of Humanness
China Mobile CEO Wang Jianzhou noted that they have 317 million mobile customers in China today, and the total market is half a billion users. He said that people are using mobile devices as extensions of themselves to reach out to others via voice and SMS, and that if someone doesn’t have a mobile phone they will lack basic functions of what it is to be human.
His company is adding 6 million new subscribers per month. When asked if he is considering expansion outside of China, he replied that they have so much growth potential there that they are completely focused on that market.
NBC Sees Dollar Signs In Mobile, Sony Not So Much
Both Stringer (Sony) and Zucker (NBC) want to sell content to mobile users, but they have very different opinions on how effective they’ll be.
Zucker lamented the currently fragmented U.S. market, but seems optimistic that they’ll be able to move their merchandise effectively in the future (particularly short form video). He also said revenue splits need to change dramatically - today content creators are offered only 10% of revenue from sales, with the vast majority going to the carrier. Competition and openness will change this, he said.
Stringer was less optimistic, noting, for example, that Chinese customers don’t buy content, just blank CDs. “It won’t be easy to hang onto the price of content” he said, adding a quip: “When you defend the status quo when the quo has lost its status, you’re in trouble.” Stringer is highly charismatic and entertaining, but his distress came through clearly. At one point when someone asked him when new Sony OLED screen technology would come to mobile devices at a reasonable price point, he noted the high cost of production and joked “making a profit on consumer electronic devices is one of our goals.”
FCC Defends Its Compromise
FCC Chairman Kevin Martin defended their recent decision to partly open up the mobile market, but reject many of the key rules requested by Google.
For example, requiring network operators to sell access to others at wholesale rates would reduce their incentive to “upkeep the pipes.” Investment in infrastructure is key, he said, and forcing open networks could hurt the industry.
I asked Martin whether Google’s open letter put pressure on him and his commissioners to open up the spectrum rules. He said it didn’t, citing far more private pressure to keep things static from the existing carriers. It did give him a tool to help convince his commissioners to open up at least partially, he said.
Ok … this is NEWS. Thanks for the updates Mike!
Great summary, thanks for the coverage.
this is horrible….i can’t believe people do this!
wow @ China Mobile adding 6 million new subscribers per month.
Stringer > Bono > Zucker
Small typo, 700 MHz spectrum, not 7700 MHz spectrum
yeah this is news, and this IS a panel of powerful suits, not the party-like panels one is used to see in two-point-oh events talking about youtube… oh sorry that was a year ago… talking about facebook and the future of ugc
thanks!
Soon most babies will have cell phones, and cell phones will have babies.
this is coverage? more like dictation.
Google needs to win that 700mhz auction. Deploy free and open wireless broadband using WiMax routers that people would install on their current ADSL, Cable, Fiberoptic Internet connections at home using the FON model of deployment. Let the users build the network, all you need is to provide a cheap $5-20 WiMax and WiFi router to be available and subsidized.
Complete global free wireless broadband could thus be achieved very cheaply and bandwidth would come from the existing Internet network provided by all the ISPs as well as Google could add a whole bunch of Fiber optical base stations to the mix to improve the bandwidth availabillity and reliabillity.
China needs to jump directly to 700mhz wireless broadband as well. European countries need to launch it very soon as well. Some european countries are talking about switching on the 700mhz for wireless broadband only in 2012 or 2015, why wait, that makes no sence.
Lego Brain… you just blew my mind.
(to be fair though, that’s not very hard to do)
mobile ads are on everyones mind. They have been for years, the missing element is of course the GPS or rapid triangulation relay. since really thats the relative aspect to any lucrative mobile search.
Think about the initial ROI/real world value for brick and mortar companies on mobile traffic… google has been left out of the local/geo isolated economies largely due to the on demand nature of the average pizza parlor’s clientele. Android is a platform for google to capture that revenue at the OS level (anti trust?). So the next question is, Will Joe’s Pizza bid on a search term, where that CPM (I assume) is relative to a radius and the number of competing business in that radius? think about it for a second.. It’s really exciting and uncharted.
As I just blogged, one interesting hiccup to this whole mobile thing could be some new patents from a company called Smart Agents that appears to cover all GPS equipped cellphones that find stuff that is near you. It means that Apple, RIM, and Google are already infringing.
mobile ads are on people’s minds, but it’s more than just GPS. The handsets have to have a viable ‘click through’ experience so that users can take the ‘next action’. to deliver that, a more consistent handset application platform is require (just think about it .. ). google’s android initiative is great at raising the spectre of competition and raise the standards, but with handset design to market timeframes being what they are and the dynamics of the ecosystem, realistically it’s going to be a few years before we’re really there ..
Thanks for this coverage Micheal. Great to hear this being discussed.
I’ll be leading a workshop on much the same topic at the LIFT conference in Geneva two week from now. Hopefully we can continue the conversation from this august group.
more info:
Open and the Future of Wireless
http://wirelessnorth.ca/?p=56
Any interested techcrunchers are invited to attend.
excellent post. Thanks.
btw - in the picture is Eric Schmidt looking at his watch?
@13 -> I was originally going to post that exactly, but I spew enough about patents hindering American innovation.
@14 -> I envision the action being a realtime GPS google map with the “you are here” and “they are there” layout. what more could you want? search for pizza, show me a proximity search , I select one, it practically walks me in the front door.
IDK
In my comment above # 13 i provided the wrong link to the GPS patent article, which is really here. Sorry.
I’m always amazed at the mobile phenomenon in Asia, vs. the PC focused economy here in the US. Mobile has great growth ahead of it, but the screens are so small for us big Neanderthals here in the US. There’s only so much you can do on a small screen.
Another panel should be put together to explain why our phone technology trails behind Asia and Europe.
Always interesting to see the world’s financial elite convene in one of the most expensive places in the world and discuss how to put an end to world hunger.
Am I the only one who thought that pic looks kind of funny? The guy in the middle looks like he’s made himself pretty comfortable.
pretty comfortable indeed
I’m still rejoicing for seeing a panel without mark wuckerberg and kevin pose.
When is the Future starting…?
Technicle… it’s still in alpha… and looking for funding.
A suggestion: would be a good idea that this panel of experts dictated congresses or seminaries through different countries; sharing their experiences, giving suggestions and tips.
Man, with that much horsepower on the panel, it’s surprising the whole thing didn’t just spontaneously combust from critical mass! Thanks for covering this panel, Michael, as some of us bloggers aren’t quite hip enough to get an invite to “The” event of the tech year.
I linked to your post from my blog for the Innovators-Network and hope some of my readers will visit TechCrunch to read your entire piece.
Best wishes for continued success,
Anthony Kuhn
You should have been harder on the telco puppet from the FCC.
Google will bid to lose. They have no interst in buying that spectrum.
stop getting laid and keep the news coming.. stay away from scoble and the hot international women.
keep it in your pants and do your job!
Advertisers should be creating mobile versions of popular sites (like typepad) with ways to strip out the unnecessary content on web pages that appear and are difficult to navigate on a mobile interface. I’d be ok with a banner that gave me that sort of navigation on a mobile.
I linked to your post from my blog for the Innovators-Network and hope some of my readers will visit TechCrunch to read your entire piece.
Where are the WOMEN in this panel / discussion / conference?
Hmm I understand why google requires more open networks and platforms - selling ads is the only major cash flow at Google.com … can you imagine google sending sms to all carrier clients free of charge or sending you a ad based mms while walking next to a pizza restaurant…. of course they will love the open networks as it will save them a lot of money for licence and contracts.
Imagine the impact it will have on all google services, if a network is open google will be able to know where you are all the time - no need of a gps.
You just need to use a google service on your smartphone .. and you are done.
Google is becoming more powerful than CIA in the next few years - it does know a lot more for everybody than CIA.
I hate to take away the focus on the topic and This is great stuff… but it really is becoming evidently alarming that google can know so much about us without us even knowing at all.
I mean… if we are logged into gmail and use google search or use any of their services, obviously they will have our click streams “monitored”.. but currently that is all restricted to the web environement.. and to say the web is a BIG place is already an understatement…
but if google has access to the mobile networks… i’m not quite convinced thats a good thing… i wouldn’t want to be tagged by a laser equipped satellite orbitting around earth for not paying my taxes…
sigh..
Video of this entire 75 minute panel:
http://www.youtube.com/watch?v=XjjoJjyIngg
Google’s “bullish” on mobile ads for good reason—its future is tied to getting ads on more places besides PCs. Anyone who’s been following mobile in Japan and Korea knows the tremendous possibilities of attracting eyeballs to the mobile internet. In the US though, lots must happen first for mobile ads to take off—in particular, the development of a healthy mobile ecosystem—and we’re a ways away from that.
For more, see my blog: http://www.thecatalystcode.com.....tle-screen
#21 - excellent!
All the big knobs sitting around posturing, while keeping the proprietary secrets, and plotting to exploit humanity in New and Exciting ways.