Today’s Addressable Market

The other numbers that mobile publishers grapple with are those that determine the real size of today’s addressable market. JAMDAT chose the ARC Group for the following data:

The primary growth drivers of our business are the number of mobile phones in the market capable of downloading our applications and our ability to deploy our applications to those mobile phones—primarily through our carrier relationships. We believe that over time the majority of all mobile phones worldwide will be capable of downloading data applications through application environments like BREW and Java. According to ARC, worldwide mobile phone sales are expected to grow from 465.0 million units in 2003 to 689.1 million units in 2008. In addition, ARC estimates that sales of mobile phones with BREW are expected to grow from 11.6 million units in 2003 to 75.6 million units in 2008, and sales of mobile phones with Java are expected to grow from 95.5 million units in 2003 to 594.9 million units in 2008, collectively representing approximately 97% of all mobile phones expected to be sold in 2008. According to ARC, sales of BREW handsets in North America are expected to grow from 5.5 million units in 2003 to 31.0 million units in 2008, and sales of Java handsets in North America are expected to grow from 7.3 million units in 2003 to 71.6 million units in 2008, a 52% compound annual growth rate.

The good news here for mobile game publishers is in the staggeringly large numbers. Mobile handsets outsell PCs by four or fivefold. They outsell consoles by about fifteenfold. In 2003 more than 20% of new mobile handsets were game-ready. By 2008, this percentage will be as near to 100% as it is likely to get.

JAMDAT has picked numbers they believe to be reasonably accurate. However, we get only annual sales figures for game-ready phones, not an installed base, nor any data on what portion of the installed base gets used to download games. This illustrates the relative blindness of the mobile publishing industry.

Will mobile handsets be put in the shade by mobile consoles like Game Boy DS and PSP? Or will mobile handsets become an entertainment medium rivaling television in universality? These numbers don’t reveal the answer. The mobile entertainment industry needs to know its customers better by the time this challenge arrives.