Wireless industry going through its AOL phase

CORONADO, Calif.--It's the mid-1990s for the mobile industry: lots of walled gardens, lots of fragmentation, and lots of promise.

We've been writing about the future of mobile computing for years now, and it's no surprise that panelists at the Future in Review conference are eyeing the same space. There's a clear shift going on toward mobile computing, seen both in the PC space, as notebooks overtake designs, and in the evolving handheld/subnotebook space with a surge in interest in smartphones and things like the Eee PC.

The current mobile situation reminds Jonathan Bulkeley, formerly of AOL and currently CEO of ScanBuy, of his days at the once-ubiqituous ISP in the mid-1990s. Companies like AOL, Prodigy, and CompuServe offered metered access to the Internet in those days and strictly controlled what the user accessed on those networks; just as mobile ISPs like Verizon, AT&T, and Sprint have done for many years until recently.

By 1996 or 1997, however, the entire market had changed to meet demand for flat-rate pricing, again mirrored by the recent actions of the carriers to provide all-you-can-download plans. Once subscriber revenues were fixed at a certain number, the ISPs needed to find advertising and service revenues to keep growing. And that's what the current mobile industry needs: "The next phase is advertising and commerce growth--who's going to get the $1 trillion in value (that's up for grabs)?" Bulkeley wondered.

Before that comes to pass, however, a few things have to change. Hugh Bradlow, chief technology office for Australian carrier Telstra, bemoaned the current fragmented state of the mobile software industry. "The handset industry is in an absolutely shocking state," he said, noting that mobile application developers are faced with way too many competing platforms for their products.

Yahoo is trying to completely bypass that issue by focusing on mobile widgets, said Gary Roshak, vice president of mobile advertisers and publishers at the company. "The world doesn't need another phone operating system. We don't really care if you run on (the various operating systems). We want to fuel these mobile-first experiences."

The devices themselves also need to change, Bulkeley said. "These devices aren't meant to navigate a portal page, but they are best suited when you know what you want to get and you go right to it," he said. Bulkeley's new company is trying to get the mobile industry to support bar-code scanning, where mobile users can take a snapshot of a bar code in a store and get instant information regarding a product or service.

But the trends are undeniable. Rajeev Chand, managing director and wireless analyst at Rutberg & Co., noted some statistics that ESPN released just after the end of the last NFL season. On the last weekend of the season--when football fans were captivated by the thrilling New England Patriots-New York Giants game--ESPN's mobile site recorded more hits than its regular site.

However, it's just not enough to capture the traffic, as any ex-AOLer knows.

"We learned from the first phase that whoever controls the traffic and monetizes it, wins," Bulkeley said.