Tuesday, August 16, 2005

Mobile Content: Seasonal with Incremental Growth

Seamus McAteer at M:Metrics posts his thoughts on the recent stock market pummelings Jamdat, Infospace, and Verisign took due to the current outlook for their mobile content businesses. McAteer argues the investment community needs to better understand that "the market for mobile content is seasonal with steady year over year growth."

He points out that:

    Downloads of content and applications are strongly influenced by diffusion of new handset technology which expands at a steady pace with a spurt during the Christmas and Back-to-School selling seasons. Content dowloads are also likely influenced by aggressive promotion by carriers and OEMs which is also seasonal in nature.
He also notes that as new channels open up and expand the market, the growth will still be incremental in nature. Interestingly, McAteer predicts that "downloaded games on handsets will appeal to about 15% of subscribers in a mature market while ringtones will be of interest to about 25% of mobile consumers."