Tuesday, August 03, 2004

Total Market Size: 850 Million People

JAMDAT has now entered, but not fully developed, major channels throughout the world. The number of potential customers in these channels represents the great majority of customers in markets that have sufficiently developed economies to contribute measurable revenue to JAMDAT’s results. How big is the market that JAMDAT can now reach?

We have agreements to distribute our applications in 38 countries through 72 wireless carriers, whose networks serve approximately 850 million subscribers. These wireless carriers include AT&T Wireless, China Mobile, Cingular, mmO2, Nextel, NTT DoCoMo, Orange, Sprint PCS, Tata Teleservices, Telefónica Móviles, T-Mobile, Verizon Wireless, Vivo and Vodafone.

850 million subscribers. If there are about 1.3 billion subscribers worldwide, JAMDAT can reach 65% of the total, indicating they are not quite done with channel development, but are on the down-slope of that effort. As JAMDAT reaches the practical limits of channel development, the number of mobile subscribers will also continue to grow. Analyst predictions are in the neighborhood of 2 billion subscribers by 2008.

For a mobile games publisher, the practical limits of channel expansion, relative to the total number of mobile subscribers, depends on the technology to reach those subscribers through mobile commerce systems deployed by network operators. JAMDAT’s 65% reach of total mobile subscribers today indicates there is no problem with mobile commerce coverage. In markets where customers can afford mobile games, the systems to sell to those customers are in place.

There are two key facts about the mobile entertainment market (and mobile commerce in general): First, the numbers are very very large, on any yardstick for any market you would care to compare to. Second, the speed and economy with which relatively small vendors can reach this market is unparalleled. Imagine this: In 2008 or 2009 a product manager at a mobile games publisher will, with a couple days’ work at his desk, be able to make a product available in 100 channels worldwide, and put that product within the reach of more than 1.2 billion customers.

These are not cracksmoking dot-bomb numbers. These are numbers that have a solid foundation in other much larger markets for mobile handsets and infrastructure equipment. The order book at infrastructure equipment makers already records the tens of billions in purchases by the network operators who have already accepted and deployed mobile data and mobile commerce systems.


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