New Report Says Manufacturers Lean Too Heavily on Individuals to Purchase Mobile Devices

Mobile device manufacturers still do not understand the enterprise sell according to a new report by independent market analysts,Datamonitor.

The report, Enterprise mobile devices: Strategies to enable the shift from devices to solutions, says manufacturers are leaning too heavily on individual users who purchase mobile devices, and then take them into the corporate arena. Yet, as interest in mobile enterprise solutions gains momentum, the solution-sell is what is of paramount importance.

The report details how mobile device manufacturers will have to address this market if they are to make the most out of the enterprise opportunity. It also reveals that small to medium sized companies (SMEs) are set to account for the largest share of global corporate spend on mobile solutions.

Consequently, asserts the report, mobile operators are an important channel to market in the future for enterprise mobile device manufacturers. However, Datamonitor states that they have their work cut out if they want to take advantage of this opportunity.

The global mobile enterprise device market will be worth an estimated $1.3 billion in 2006 according to Datamonitor. Devices will account for 16 percent of the total, falling from 29 percent of the overall solutions market in 2001. The drop in proportion attributable to devices will occur as they fall in price and as larger companies invest in complex solutions.

Currently, according to Datamonitor, mobile solutions tend to be sold through large systems integrators (SIs) or value-added resellers (VARs), and this is likely to remain the case for the next 12-18 months. However, the cost of sale associated with selling technology into the mid-market is normally too great for these companies to justify. In time, there will be opportunity for mobile operators to become an important channel to market for enterprise mobile devices. "

Because we are still at the early adopter stage in the mobile enterprise solutions market, it is still the large SIs that tend to 'own' the customer," said Richard Clifford, Datamonitor Mobility analyst. "However, as technology standardizes and solutions commodify, operators will be able to offer packaged mobile solutions. Device manufacturers must be aware that their channel strategies need to remain fluid over the next couple of years, changing them according to company sizeband and vertical, in addition to the type of solution and device being offered. Operators will only be offering low value mobile solutions, but the volume of sales could make this a very lucrative segment of the market."

Although larger companies currently account for the largest share of the mobile enterprise solutions market, Datamonitor predicts that the smaller two sizebands (SMBs, 10-15 employees and SME1's, 51-250 employees) will represent approximately 64 percent of the total ($5 billion) by 2006. While the mid-market does represent a great prospect for enterprise mobile device manufacturers, the main channel into this segment of the market, namely the operators, still has a great deal of work to do before being able to take advantage of the opportunity.

"Even low-value, commodified mobile solutions will have to be targeted at specific segments of the market," Clifford said. "While operators are used to doing this from a consumer perspective, addressing the enterprise with voice and data solutions is a totally different kettle of fish. Sales staff will need to ramp up knowledge of vertical industry issues very quickly, while considerably more attention must be paid to understanding enterprise IT requirements. This has not been a strong point for operators in the past, many of who have dealt with Communications departments. As mobile solutions rapidly come into the remit of the IT department, though, it is clear that operators have a lot of work still to do."