The industry is decidedly upbeat about the prospects of mobile in 2008. In fact, it’s almost as if the vast majority of mobile execs had swallowed hype pills and put blinders on. From my vantage point, and based on the fact I devote a significant proportion of my time to watching the industry as it is and not how it could be, I cannot share this optimism. Granted, mobile Internet use and awareness is likely to increase thanks to products like the iPhone. But will this year mark a real change? Or are we all going to meet in less than a month at Mobile World Congress to scratch our heads and quiz our peers on the “next big thing”?

Instead of adding my voice to the cacophony of typical and rather mainstream industry predictions for the year ahead, I would like to hone in on the mobile trends – and companies – I see just under the radar that may well break onto the scene this year or, at the very least, experience very strong momentum this year:

• MOBILE CLASSIFIEDS: The classifieds business is well established and going strong on the Internet as the rise of the likes of Craigslist, Gumtree, and OLX shows. I anticipate seeing a similar development in mobile, and expect most of the action to be in developing markets. In countries with low PC penetration, a model that allows buyers and sellers to connect and conduct business on an eBay-like marketplace via their mobile phones offers an attractive alternative to newspapers. Mobile companies in this space have a simple revenue model based on premium SMS fees, and solve a very concrete and serious problem for their users. One company positioned to benefit from the move to P2P m-commerce is CellBazaar, a provider that operates in Bangladesh. CellBazaar doesn’t conduct transactions; it just makes the connection between the parties. I don’t think 2008 will necessarily be a breakout year but I certainly expect strong growth in this area.

• MOBILE GAMBLING: After a lot of talk – and a lot of conferences – 2008 might be the breakout year for mobile gambling. I base my prediction on a simple observation and some overwhelming facts: A number of players in this space have finally begun to experience sustained growth in usage. One good example is Probability. One of the early pioneers in direct-to-consumer (D2C) mobile gambling, the company is now on a run rate of over GBP2 million in net revenues per year and has grown over 80 percent since last year. The company aggressively uses mobile advertising to drive subscribers and also caters to high rollers with a mobile VIP lounge. Assuming Probability manages to maintain this growth rate while keeping its acquisition costs under control, it could be breaking even in 2008.
• WIRLESS PHONE BOOTHS: Offering mobile phone access, though coin- or card-operated wireless phone booths, to people who can’t afford the phones is a smart idea. In this space, one company called Cellnets stands out. They are building a large network of “phonebox” mobile phones in partnership with local village entrepreneurs in developing countries and will have a very large installed base by the end of the year.
• AD-FUNDED & COMMUNITY WI-FI: Paid-for Wi-Fi hasn’t taken off in a big way, but ad-funded and community-pooled Wi-Fi is another story. One to watch is Spanish maverick Fon. Fon lets people turn their Wi-Fi routers into a money-making proposition and rounds out the offer by providing those people who open up access to their routers with free access to the Wi-Fi connectivity provided by everyone else who has made their router available to the community. There are now over 600,000 “foneros” – another name for the community members who have enabled the sharing of their router – and more to come. In my opinion, 2008 might prove to be a breakout year if the company can turn the ISP deals it has signed in 2007 into successful fonero acquisition drivers.

No doubt many of you wonder why there is no mention of mobile advertising, let alone a single mobile advertising company. After all, wasn’t 2007 rocked by a wave of M&A (I’m thinking of Nokia buying Enpocket, Microsoft buying Screentonic, AOL buying Third Screen Media, and the list goes on…) Let’s just say that while I am enthusiastic about several of the players and business models gaining traction, I’m not convinced 2008 will be the banner year for mobile advertising that analysts and observers would like to have us think it will be. 2008 will see sustained growth but keep the champagne in the fridge!

Pamir Gelenbe is an Entrepreneur in Residence with Newtonmore, a family office based in London. His most recent investment is Seatwave, Europe’s leading fan-to-fan ticket exchange. He is still looking for a fantastic mobile media company in which to invest. If you know one, Pamir can be reached at gelenbe (at) gmail (dot) com.

This entry was posted on Thursday, January 24th, 2008 at 1:52 pm and is filed under Guest Columns, Location-based services, Mobile Advertising, Mobile Content, Web 2.0. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.