Source: The Boston Globe
By Carolyn Y. Johnson, Globe Staff | August 29, 2007
The cellphone world, dominated by giant telecommunications corporations, is colliding head-on with the Internet, where hackers abound and a good idea can grow into a Google — spawning a full-fledged mobile media industry.
The intersection of the wireless world with the Internet’s openness has long been anticipated, but it’s edging closer to reality as new technologies, devices, and consumer behavior finally chip away at the telephone’s long legacy as a device used for talking.
Apple’s high-profile iPhone launch cast a media spotlight on a device that is more handheld computer than phone. Internet giant Google sparred last month with wireless carriers over the rules governing the upcoming auction of radio spectrum, used to carry calls and data. Sprint plans to build its highly anticipated wireless broadband service, called WiMax, in Boston in 2008. And the first Mobile Internet World, an industry conference on the mobile Internet, comes to town this fall.
The activity has created opportunities for a slew of new local wireless start-ups. Mobile media companies in New England attracted $33.5 million in investments in 2005, a number that tripled to $104.2 million last year, according to Dow Jones VentureOne. In the first half of 2007, mobile media companies have attracted $49.5 million in investments in Massachusetts.
“People say that it’s just a novelty now. But when the PC connected to the Internet, it transformed a word processor to a communication platform, to a media platform,” said John Puterbaugh, founder and chief strategist at Nellymoser in Arlington, which takes content from places like Comedy Central and VH1 and mashes it up into cellphone-sized bits of video, audio, and visuals. Phones are now at a place much like the PC was in the mid-1990s, Puterbaugh said, and the Boston scene is rich with a new generation of consumer mobile companies trying to make a business in a largely undefined space.
Established local industry leaders are key to the burst of new activity. Two companies that went public this year build the backbone infrastructure that enables carriers to send network data — Starent Networks in Tewksbury and Airvana in Chelmsford. M-Qube Inc., a Watertown company that built technology to deliver content to phones, was bought by VeriSign for $250 million late last year. Third Screen Media, a Boston company that created a mobile advertising network, was acquired by AOL for an undisclosed amount in June.
But on top of those more established players are start-ups that are so plentiful that the mobile scene is beginning to seem crowded — even as only about 10 percent of cellphone users subscribed to a data plan in the first quarter of 2007, according to Julien Blin of the industry analyst firm IDC.
Many companies offer new ways to get content on a phone — whether it’s mainstream music videos or niche content, like a foodie’s favorite video podcast, and their approaches include everything from working with carriers to trying to reach consumers directly.
Buzzwire, a Bedford company that received $4 million in venture funding, lets people stream podcasts, live radio, video clips, or other content on their phones. Groove Mobile in Bedford is a mobile music company that powers Sprint’s music store and also provides downloads and sharing services to users. Cambridge’s Oxy Systems earlier this year unveiled Phling, a service to allow a user to stream a music collection from a home computer onto a phone. Mobicious, in Needham, raised $4 million in venture backing this year and aims to become the ultimate go-to spot for mobile content — allowing people to search for mobile content and ship it directly to their phones instead of going through carriers’ stores.
“It’s sort of a cross between Google and Yahoo in the early days when they were indexing the Internet; we’re indexing the mobile content,” said George Grey, chief executive of Mobicious.
Already, the cellphone industry has spawned new business — the ringtone industry in the United States was valued at $600 million in 2006, according to Broadcast Music Inc. The content industry is also projected to grow more than 60 percent, from $2.3 billion in the United States last year to $3.8 billion this year, according to IDC. But many believe mobile content will have room to expand further as consumers begin to use phones more like they do the Internet.
Razzberry Sync, a Boston company, creates premium text message content — ranging from beauty and fashion tips for teens to “blitz fiction,” fiction fed to the phone in SMS chapters. And 80108 Media sends insider thumbcasts, including music reviews, event alerts, and news to phones.
Many new companies are also bringing new categories of Web content to phones. Mobile social networking sites, which allow people to tap into their online network of friends when they are walking among people in the flesh, may seem a bizarre concept, but a US study by M:Metrics found that already 7.5 million people, or 3.5 percent of mobile subscribers, use such mobile networking websites.
MocoSpace in Boston has created a social network primarily geared for phones. It says nearly a million people have signed up. RPM Communications is working toward a mobile social network that incorporates voice and sound. This year, the company launched Foonz , a service to quickly set up group conference calls. RPM says Foonz is a stepping stone toward its larger vision of a voice-enabled mobile social network.
Meanwhile, other wireless companies are trying to break the most formidable barrier to cellphone usage — the keypad. Digit Wireless in Burlington integrates letters and punctuation keys onto the keys found on a standard cellphone keypad, and has launched on several handsets used in other countries. Vlingo Inc., a Cambridge company, introduced a beta version of its voice-based cellphone interface this month. Nextcode Corp. in Concord is working on turning a mobile phone camera into a barcode scanner, so users can click a picture of a bar code from a poster or in the pages of a magazine and be directed to a related Web page or get content on their phone.
“People know there’s stuff out there they could be doing with their mobile phones — they just don’t know how to find it,” said Jim Levinger, chief executive of Nextcode. “They’re building out a Wal-Mart-sized amount of content for these stores, but a cellphone has a newsstand-sized interface, and you just aren’t going to buy it.”