KEY POINTS:
There wasn't an apple in sight at the 3GSM World Congress in Barcelona this week - unless you count the crunchy green ones filling fruit bowls scattered throughout the exhibition halls.
It was the Apple iPhone everyone wanted to see. The music phone unveiled in San Francisco last
month didn't make it to Spain, but it still managed to overshadow the mobile industry's premiere event.
It seemed like every new mobile device, from LG's luxurious Prada to Samsung's Ultra II, was benchmarked against a phone that only a handful of people have actually seen up close.
Discussions with the executives of mobile operators and handset makers inevitably strayed towards the iPhone. There was lots of gracious talk about how it would "stimulate the market" for everyone. But there was an edge to their answers, a wariness that reveals just how disruptive the iPhone is proving to be, long before it starts rolling off the production line.
A few statistics bandied around at 3GSM by Ericsson boss, Carl-Henric Svanberg, explain why. There are 2.6 billion mobile subscribers in the world, with the number expected to reach four billion by 2010. Around a billion mobile phone handsets are sold each year - most capable of accessing the internet. There are a billion internet users in the world, 275 million with broadband connections. The greater penetration of mobile phones means that for many subscribers, the mobile will become the primary internet access device.
The most popular of the new mobile services is music downloads, another factor in Apple's favour. Ten per cent of music sold last year was in the digital format and half were downloads to mobiles.
The iPhone is designed to be used in tandem with a computer, but nevertheless, if Apple can encourage mobile subscribers to access services on their phone the way it has drawn people to the iTunes music store, it holds the key to the fast-growing mobile content market. No one has managed to crack it yet.
Despite the proliferation of content portals, mobile radio and TV broadcasts, music and video downloads, people largely use their phones to make voice calls and send text messages. With the billions the mobile industry has invested in over-priced radio spectrum licences, network construction and handset development, it needs to squeeze more money from subscribers.
That explains why most of the buzz at 3GSM was around content deals between mobile players and web companies. There's a determined move to take successful "Web 2.0" stars like search giant Google, video sharing website YouTube and social networking portal MySpace and mobilise them.
Speaking at 3GSM, Yahoo senior vice president, Marco Boerries, said internet search-related advertising was the "missing ingredient" that would make the mobile content industry viable. The idea is to replicate the profitable advertising models of Google and Yahoo on mobile phones.
Yahoo has come up with the Yahoo Go 2 and OneSearch search engines solely for mobile phones - they pare down the results to give you what you may need when you're out and about: localised information - news, weather forecasts or street addresses and restaurant reviews.
Yahoo has struck a deal to make its search engine available to Vodafone Live and Boerries said OneSearch will feature on the iPhone. Google has also been developing mobile search but partnerships with mobile operators have been slow to emerge. That may have something to do with the mobile operators' desire to keep their subscribers within a "walled garden" so they can control their behaviour and keep the meter running. Google and Yahoo threaten to undermine that model. But with many operators moving to flat-rate, all-you-can-eat charging and 3G mobile subscribers using 10-50 times more data than those using older 2G phones, this new version of the mobile internet could finally be the thing that makes mobile content services pay their way.
