Evaluate Wireless Apps

There is a lot of buzz around wireless apps market. How do we evaluate wireless apps startup ? what are the critical success factors ?

entrepreneurs / VCs - please watch-out..

I guess the answer lies in SMS market success. Why is SMS so successfully ?

There are several key factors such as youth appeal for SMS. Frankly, I found it to be extremely difficult to use with phone digits being used for letters as well. However, if we consider potential revenue per SMS, it is higher then Voice. In other words, SMS generates higher "revenue/byte" for carrier in comparision to Voice.

In my opinion, the answer lies in "bang for a buck" analysis. Here is my perspective:

* Wireless "Voice" is highly optimized for wireless capacity. In 8-12 kbps, wireless operator makes significant revenue. This has set a very high bar for revenue expectation from mobile apps.

* Wireless operator has to pay a lot of money for freq. allocation (watch-out: AWS action is coming soon). This frequency allocation can carry a certain Mbps of traffic (on average), depending on choice of technology. So, operator has to maximize its revenue per Mbps/ kbps to make money. So, any mobile application has to be wireless-bandwidth efficient as well as generate revenue that is greater than or equal-to "voice" revenue. This is a tough challenge for most wireless apps to meet.

* Wireless apps needs to generate a network model, evaluate its bandwidth usage (with reasonable user experience) along with revenue expectations and compare it with Voice revenue.

Well.. This is tough for most mobile apps to meet. This is one reason for MMS being not successful in the market. The revenue expectations were simply too high. Is there any other solution to this problem ?

Hmm... I would say yes.

The solution is to build a network that does not cost as much as current 2G/3G networks do.

Wireless "voice" business is built on "high" network performance. Most wireless operators touts their "drop-calls" numbers as a measure of network quality to attract customers. Now, this is OK for "voice" business.

However, wireless-data is a very different beast. its puts higher pressure on network resources with lower revenue potential. So, what is a good strategy to win in wireless data business and create reasonable revenue expecting for wireless apps ?

The answer is cheaper network-cost to build wireless data network. This is where WiMAX or WiFi can help. By building cheaper wireless-data network and combining it with "higher quality voice" as convergence in mobile-phones as well as mobile-networks is a way to go for wireless-data success.