Mobile Business Models
by Gerald Trites

Smart phones like iPhones and advanced models of the Blackberry have become common. The mobile internet is a reality and soon to become the norm. The question that arises is what exactly will it be used for over the next few years and how can the carriers and others make money on it?

To date, the carriers have made money on internet usage and email by heavy, sometimes exorbitant charges for data downloading. However, this approach has been wearing thin with consumers, prompting the carriers to initiate programs like unlimited email. As data usage increases, they are going to have to eliminate this approach altogether because people are not going to pay through the nose for their data when they can get it for free on the regular internet.

New applications for smart phones are coming out almost daily. They include a lot of social media usage, including facebook, twitter, Google talk, Yahoo and Youtube. This might be expected, since text messaging has been one of the most popular uses of cell phones for years and most social media is based on social interaction.

Again, people are used to using social media for free, which means there is no reason to expect they would be happy paying for it on the mobile internet. So carriers are in a bind, they can't charge heavily for the data transmissions and they can't charge for the usage either. That leaves advertising revenue as the most viable business model. Advertisers will be/are keen to get in on it too, adding to the viability.

The referenced article in the Globe and Mail explores this issue, and points out that Google is well positioned in this area, since they have been so good at developing advertising based models on the internet. Chalk up another one for the big G