Mobile video phone sales hit $99B in 2007

Ads to play major role in service profitability

CAMPBELL, California — Communications market research firm Infonetics Research reported today that worldwide mobile video phone sales neared $99 billion in 2007 and are expected to grow strongly over the next 5 years, despite the challenge service providers face in making mobile video services profitable.

Infonetics’ report, ‘Mobile Video Phones, Services, and Subscribers,’ provides worldwide and regional market size and forecasts for mobile video service revenue, mobile video subscribers (3G/MBMS, DVB-H, FLO, ISDB-T, S/T-DMB, and DAB), and mobile video phones (3G/MBMS, DVB-H, FLO, ISDB-T, S/T-DMB, DAB, CMMB).

The report shows that the number of mobile video subscribers topped 10 million worldwide in 2007, and is expected to nearly triple by the end of 2008, with explosive growth continuing through at least 2011.

“The amount of money it takes to manufacture mobile video phones with high quality screens and extended battery life will continue to drop considerably over the next few years, and as that happens, service providers will want to make sure they have the phones with the most revenue-generating potential in the hands of their subscribers. We expect the number of mobile video phones to quadruple between 2007 and 2011,” said Jeff Heynen, directing analyst for IPTV at Infonetics.

Other report highlights:

• Worldwide service provider revenue from mobile video services nearly tripled in 2007 and is expected to nearly triple again in 2008
• Advertising will play a major short- and long-term role in ensuring the profitability of mobile video services, and mobile operators will be working throughout 2008 with advertisers and media buying agencies to sell their mobile video ad avails, which should become more prevalent in mid-2009
• As more mobile devices emulate the look and feel of the iPhone, much like Samsung’s Instinct and LG’s VU, and become more widely available, subscribers will be more likely to subscribe to, and stick with, a mobile video service
• Vendors of video processing and headend equipment, such as Motorola, Envivio, and Harmonic, are lining up with mobile network equipment suppliers to help speed the rollout of mobile video networks; partnerships and acquisitions along these lines will continue as the mobile video opportunity becomes clearer around the world