Survey: Ringtones, SMS top of the heap in 2004

June 30th, 2006

A year-ender survey conducted by a Boston-based communications and networking research group revealed that ringtones and text messaging (or SMS) led the way in the upsurge of wireless data services in the US market in 2004.

In its "2004 Mobile User Survey," research firm The Yankee Group said "the awareness of wireless data services skyrocketed during the past year, particularly around more mature services such as text messaging and ringtones."

The company did not mention the methodology it used in conducting the poll and the areas in the US it covered.

"This year has been a good year in wireless data. By the end of the second quarter of 2004, wireless data users totaled almost 47 million (or more than one-quarter of the total wireless subscriber base), up more than 58 percent from 29 million in mid-2003," the report said.

The Yankee Group said wireless data revenue in the second quarter of 2004 approached $1 billion, up 160 percent from roughly $367 million for the second quarter of 2003. "By yearend 2004, we anticipate almost one-third of wireless users will be using wireless data and annual revenue will top $4 billion."

But despite the increase in the use of wireless data, there are still barriers that impede the growth of the sector, the research firm noted. "For those consumers who do not use wireless data, the primary obstacle to adoption is the lack of a clear value proposition.

Other obstacles to adoption, particularly within younger segments, include pricing and services availability (i.e., handsets, breadth of data services available on some prepaid packages)."

The report indicated however, that despite these hurdles, nearly 75 percent of all respondents from the 2004 survey said that if they had another $5 to $10 of disposable income to spend on wireless data, they would be willing to spend it.

"The results also show that there is no single killer app in wireless data. If carriers — in partnership with their vendors and content provider partners - can focus on improving the user experience, delivering targeted content and apps that appeal to a diverse customer base, and addressing pricing- and availability-related issues for select segments, the near-term prospects look good," it added.