Canadian firms finally getting into wireless: Analysts

Canadian businesses are finally getting the importance of wireless, which will make this a big year for the technology.

That was one of the predictions made by a panel of experts at the monthly MobileMonday networking evening in Toronto for people working for wireless-related companies.

Krista Napier, a senior analyst at IDC Canada covering Canadian competitive intelligence and emerging technologies predicted, that enterprises here will embrace wireless business applications more than ever, while banks will allow wireless banking for the first time.

“We expect to see the big five banks either announcing or launching their mobile banking initiatives,” Napier said in an interview after the event. “Scotiabank will be the first in the spring, and we expect the others to be making announcements later in the year.” [CIBC already offers mobile banking.]

“It will probably be SMS (short message service)-based, but we’ll probably see some downloadable apps as well.”

Following the country’s historical tentative embrace of technology, we’re behind the U.S. in mobile financial capabilities, she said.

However, proof that Canadians are willing to trust their handsets to do financial transactions can be found in the number of users who donated money for Haitian earthquake relief in the past two weeks through wireless carriers.
As for enterprises, they’re starting to become interested in mobile business applications as their staff work more away from offices, she said, and more smartphones become available.

“A survey we did last year showed overwhelmingly that only e-mail and Internet had been mobilized in the enterprise,” she said. Recently, however, “we’re starting to see companies in that early adopter stage” of mobile business applications such as fleet tracking. “So we do expect to see an increasing number of business realizing the importance of this and starting to adopt these applications,” she said. “There are lots of Canadian companies developing them.

“One of the great routes to market for an emerging Canadian company will be to work with an existing ISV (independent software vendor) that has a software application and wants to make it mobile quickly for their end users and wants to work with a smaller company that’s expert in that.”

Finally, Napier predicted that mobile storefronts from wireless carriers and handset makers selling applications will become increasingly popular. While Apple Inc.’s iTunes is the runaway success now, the one to watch is Google Inc.’s Android, she said. By 2013 IDC believes Android will be the number two mobile operating system, up from zero a year ago.

While some in the industry wonder who will ‘own’ the customer – the carrier or handset makers – Napier said the better question is who will own the mobile application developers. The usual fee split from each mobile application sale is 70-30 in favour of the developer. But recently Research In Motion changed its policy to 80-20 for the developer, she said. Panelist Ron Gruia, Toronto-based emerging technology analyst for the telecom industry at Frost & Sullivan, noted that Google divvies up its application revenue 70-30, but with the 30 per cent going to carriers.

But panelist Michael Urlocker, director of equity research and the technology hardware analyst at GMP Securities L.P. of Toronto, objected to the idea of anyone owning the consumer. Apple’s iTunes may have the most credit card information of all sites, he said, but “they serve it at the pleasure of the customer.”
Meanwhile, he said, wireless operators face a series of tough questions to answer: An increasing number of Canadians under the age of 16 are getting their hands on cellphones. They can’t get credit cards, so how can carriers make money selling them things? Wireless is increasingly becoming a commodity. What new services or applications can carriers offer that subscribers will buy? Network quality is falling in some countries as wireless use increases. Will carriers back down from price wars to pay for improving networks?
On this last point, he has his doubts.


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