Java to earn operators $15.5bn by 2008

Thursday 6 May 2004 00:23 CET | News

Despite the proliferation of Java handsets worldwide and the increasing number of vendor models containing the platform, the number of actual Java users is significantly lower.

There are some very stark regional differences in this analysis, since in Japan and Korea it is believed that around 80% of all Java handsets sold in 2003 led to active Java users. In Europe on the other hand, the opposite is understood to be the case with a very low conversion rate of handsets sold to active users of only around 10%. A new report from the ARC Group, MOBILE APPLICATION PLATFORMS AND OPERATING SYSTEMS 2003-2008, estimates the Java market to have earned operators almost $1.4bn in 2003, which is forecast to dramatically increase to over $15.5bn by 2008. This equates to around 3% of all data revenues in 2003, rising to 12.4% by 2008. Removing person-to-person messaging revenues as an application category from both the total and Java markets is estimated to leave Java with a 10.7% share of total revenues in the remaining categories in 2003, increasing to 27.4% by 2008 - a fair return for Java applications in the contents categories. MOBILE APPLICATION PLATFORMS AND OPERATING SYSTEMS further finds the Java market to be dominated by the entertainment sector, and in particular gaming, which will see trafficrising from 4.3bn events in 2003 to just over 50bn by 2008. In 2003, it is estimated that entertainment formed 76% of total Java application volumes, but this will fall to around 40% by 2008 due to increased usage of Java based messaging platforms. As one would expect, games provided the most usage in the sector, with volumes of 3.6bn in 2003 or 85% of the Java entertainment sector - a level that is expected to be maintained for the next five years - and two-thirds of all Java applications. One of the advantages of Java technology is its openness,which has attracted more than 500 companies to contribute to different Expert Groups. However, this advantage is unfortunately being depleted.To date more than 260 Java specifications requests have been initiated by the leading players who generally aim first and foremost to benefit their own technologies rather than help the Java industry improve as a whole. This has made Java one of the most fragmented technologies in the history of the data industry. As a result,tool vendors cannot easily take advantage of standard APIs when building functionality into their tools and often create proprietarytechniques to achieve the benefits that the standards were originally created to address. Application portability is currently one of wireless Javas greatest weaknesses. In addition, the wireless Java industry is currently facing tough competition from within, as well as from other technologies such as BREW and advanced OSs. In order to remain competitive and win market share, players throughout the supply chain will have to maintain attractive pricing whilst also differentiating their products. They will thus need to reduce their margins if they want to remain competitive. Leading device vendors and wireless network suppliers are still using proprietary technologies and will not outsource alternatives unless they can save money and reduce time to market. This has led to strong pressure on pricing, challenging competitors and pushing them to either align themselves or lose share if they want to maintain margins. In 2003, the number of devices featuring applications platforms in conjunction with an OS, including Java and BREW, or GVM reached 115m units, most of them being mid-range to high-end devices. The concept of featuring these platforms over proprietary OSs will continue to prevail in mid-range handsets and will progressively penetrate the lower-end. However in thehigh-end of the market, including smartphones, there is tough competition between feature rich open OSs and such platforms embedded over proprietary OSs. The total number of devices shipping with one or more of these platforms on the top of proprietary OSs will reach 627m units in 2008 from 102m units shipped in 2003. Handsets equipped wi

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Categories: Payments & Commerce | Mobile Payments
Countries: World
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