Table of Contents
- 1 Chapter 1 Problem Definition
- 2 Chapter 2 Introduction
- 3 Chapter 3 Technology and standards behind MMS
- 4 Chapter 4 MMS Message development
- 5 Chapter 5 Business
- 5.1 Business Model overview
- 5.2 Situational Assessment
- 5.3 Interview
- 5.4 Case Study: Nokia
- 5.5 Business Analysis and conclusions
- 6 Bibliography
Chapter 1 Problem Definition
The topic “Multimedia Messaging Service” (MMS) is a big area to be covered.
Hence, it is necessary to decrease the scope of the report.
We have chosen to describe the parts that we find most interesting and important, to make
a short statement about MMS and its possibilities in the future.
We will make a description of the technologies and standards behind MMS, which among others
includes the needed changes in the telecommunication networks, and a description of how a
MMS is developed. One thing is to have the technology, another is to make i a success. There-
fore, the underlaying business models from the big market players in Denmark will be described
to give us the right background to make a conclusion over the main topic – the future of MMS.
It is the idea that this conclusion should state some of the possibilities and challenges for MMS
in the future.
Chapter 2 Introduction
MMS, Multimedia Message Service, is one of the new hot topics in the world of mobile phones
With MMS you are able to recieve long text messages, pictures, voice and video clips from toyour phone. MMS is, from a user’s point of view, very similar to the much simpler SMS, but itscapabilities are far more advanced than the latter. Just imagine the opportunities of bringingmany of the popular services like email and web surfing into a mobile phone!
MMS is here – ready use
From the 18th of November 2002 customers of TDC will be the first to experience MMSin Denmark. Although the possibilities of use will be limited in the beginning the service willbe free of charge in a limited period. But TDC isn’t the only company to provide a MMSservice. Ideation House has a service which lets the users watch MMS messages in a web browser.The service is partially free of use and requires a MMS enhanced phone with GPRS.A good example of how MMS are being used at the moment can be achieved by looking atInAphone and Ekstra Bladet’s service for e.g. golf enthusiasts. After a simple sign upprocedure MMS messages are being sent to your mobile phone automatically with the latestnews from the Ryder Cup.
WAP Forum defines MMS as  a system application by which a WAP client is able to provide a messaging operationwith a variety of media types.
is the bearer of MMS but it is important to remember that it has nothing to do with
browsing via WAP. Read more about WAP later.
Remark: The term ”mobile phone” is often used, but also handset and terminal are used as words for a mobile phone.
E.g. ”terminal” is used especially when focusing on the software and handset is another word for mobile phone.
In the rest of the report these three expressions will be used.
WAP = Wireless Application Protocol
MMS take off from SMS
Since the boom of the use of SMS in the late 1990s, short messages sent by mobile phones
have had a tremendous success. They are relatively cheap , quick and are extremely useful in connecting people (pun intended). But the SMS technology is limited in many ways. For
instance is it only possible to send text messages and they can only be up to 160 characters
long (that is, up to four SMS messages can be combined but it is the same technology that is
used). With today’s many multimedia applications, such as the ones that email and the internet
provide, it is reasonable to develop a new standard for messages between mobile phones. The
successor to SMS is MMS (actually there is one message service between SMS and MMS called
EMS, Enhanced Message System, but we will not focus on EMS in this report). From Figure 2.1
Figure 2.1: The number of sent SMS messages first half 2000 and 2002.
you can see that there has been a tremendous boom in the number of sent SMS messages in
Denmark in the last two years. The tendency of a rapid growth in the SMS market is expected
to continue the next couple of years and will – hopefully – spread to MMS. Or, that is what the
providers of MMS want to happen.
The MMS providers
In this report only to providers of MMS are analyzed, Ericsson and Nokia. The reasons why
these two companies are the only one analyzed are because they are the biggest companies in
this area and because they are the only ones selling mobile phones that are capable of sending
Nokia and Ericsson, have they own ways of marketing their MMS products. But, as the two
pictures from Figure 2.2 shows, there are some similarities in the way that these companies
brand their new MMS products.
A way to make people use MMS instead of SMS is to sell the new mobile phones cheap. This
approach is actually what caused people in the mid 1990’s to buy mobile phones for 1 krone and
that was what startet the SMS boom. Of course the providers of MMS want that to happen again, but it is expensive to sell new phones at lower than production-cost prices. Another
way to create a market for MMS is to market MMS with the new features such as sending
pictures, as visualized in Figure 2.2. Especially in Asia there has been a rapid growth in the
market of cameras that can be connected to mobile phones. The similarities are not hard to see.
Figure 2.2: Branding of MMS by (a) Nokia and (b) Ericsson
But these two providers are focusing differently, though, as described in Chapter 5
Potentially there is a big market for MMS. The revenue of SMS is very high and if the
providers of MMS can be just as successful as with SMS then MMS could be the killer application
of the next mobile generation. But the money paid for a SMS message (25 øre to 1 Danish kroner)
is nothing compared to the prices of 1 to 5 kroner for a MMS message. Read more about pricing
in Chapter 5.
Push and Pull
Much used in SMS and a key feature of MMS is the use of push and pull. Push means that
someone (e.g. the provider) decides what information you should have, and gives it to you
automatically. Pull is the opposite—when you want to do something. You could for instance
sign up for a service that sends you a new message when your favorite soccer team has just
scored, with a picture of the goal. Push and pull is all about control – you decide what you want
to do and make it happen automatically.
Expectations for MMS
The providers of MMS hope that MMS steal many of the current SMS users. There are big
expectations to mobile phones with build in cameras. In the next couple of years there
will be a significant growth in the sales of cameras for mobile phones, which could push the
advancement of the market share of MMS even further. TDC expects that 50 000 customers
will buy a mobile phone with MMS within the next 6 months and even bigger sales are expected
in the future.
But there is a catch. MMS cannot work with much of today’s mobile phones and the core networks are not ready for this new technology. The core network must be ”upgraded” to a
higher level. Today’s core networks are so-called second generation networks (2G). In the future
we will have the third generation network (3G) which will provide the users with faster, more
enhanced and new services. Many think of MMS as a 3G technology. That’s not true. Actually
MMS can be used with the existing 2G network (with some enhancements). This enhanced 2G
network is often referred to as 2.5G and supports some of the upcoming features of 3G.
Another challenge for the providers is to overcome the memories of WAP which turned out
to be a failure. If the users feel the same way about MMS as they did about WAP, then the
providers have a very tough task ahead getting people to shift from SMS to MMS.
Read more about the technological challenges in Chapter 3
Overview of the report
In Chapter 3, the technology behind MMS will be revealed. One part will be to describe the
different objects needed to make MMS an opportunity and another part is a case describing all
the phases from making a MMS message until it’s been delivered to the receiver. Chapter 4
focus on the very MMS message; how it is made and which programming languages are used.
Chapter 5 focus on the market of MMS and the players. In this chapter important issues from
interview with people from Ericsson and Nokia are explained. Also, analysis’ of the companies
marketing strategies and their focus areas are covered. Chapter 6 is the conclusion with roundups
from all the chapters and our opinion on the future of MMS.
Chapter 3 Technology and standards behind MMS
The standard behind MMS is developed by 3GPP in co-corporation with WAP Forum.
The standard is for the future 3G networks, but the technology is already used by the network
operators who launch MMS on the existing WAP as bearer network. The standard from 3GPP
is as mentioned further defined by the WAP Forum in three new specifications. These stan-
dards define the architectural overview, transactions between terminals, MMS servers and the
message content and the format of communication between terminals and MMS Centres.
This chapter and the chapter about developing MMS (Chapter 4), covers the fundamental ideas
in these standards.
One of the important players in the business is the Open Mobile Alliance, that concist of the
biggest companies with interest in mobile communication. The vision is to ensure interoperabil-
ity across the different operators and terminals, which is done by using open standards and one
of the key technologies for the OMA is actually MMS.
The MMS standard is similar SMS a store-and-forward transmission of messages, which dif-
fers a lot from the mailbox solution known from emails. The user gets the messages directly
on the phones without calling any servers, but the actual downloading time will not be noticed,
since the message will not be shown before it is on the phone.
The technique used in both SMS and MMS is called Push and pull. Push means that someone
(e.g. the provider) decides what information the user should have, and does it automatically.
For instance, when a mobile phone is turned on, it automatically starts to download any new
messages. The user need not do anything to make this happen.
Pull is the opposite – when the user wants to do something. It could for instance be sign-
ing up for a service, that for sends news and pictures when onces thef avorite soccer team
scores. Shortly said the push and pull is about control. The Pull technique will be used in the
way that the user sends a SMS to receive a MMS containing the needed content.
The 2.5G network that is different from 2G by having GPRS and in the future EDGE im-
plemented, is to be used for launching MMS. This is done by using the existing Wireless Ap-
plication Protocol, that is made for delivering services to mobile users. Technologies as GPRS and EDGE are important to insure the needed data rates when sending multimedia content to
mobile phones, and they help making the convergence to the future 3G UMTS network easier.
The MMS network
To make it possible to send MMS messages, there has to be a network that can handle the mes-
sages. As mentioned earlier the bearer network is WAP, but the essential new in the network
are the MMS Centres(MMS-C), which is described in Figure 3.1. It shows a MMS-C that is a
Figure 3.1: The MMS network
part of the operator network which consists of the MMS Proxy Relay, MMS store and the MMS
servers. It is the MMS Centre that make it possible, for instance terminal to terminal messaging
and in general flexible adressing of messages. It is from the MMS-C to the terminals that the
WAP network is the bearer of the MMS messaging.
To make the actual communication there have to be a connection/roaming agreement between
all the operators. In the figure below it is illustrated by the connection between the two MMS
Proxy-Relays. In fact each operator must have a MMS-C and roaming agreements to ensure the
their subscripers can use MMS.
To begin with the terminal it has to have an in build MMS functionality, called a MMS Client,
so it can interact with the MMS Proxy-Relay. The Proxy-Relay provides access to the MMS
server and makes it possible to interact with other similar messaging systems. The MMS server
handles the MMS storage.
The MMS Proxy-Relay also connects to the Internet which provides traditional email services
by using SMTP protocol for sending messages and the POP/IMAP protocols to retrieve mes-
sages. Finally there is the Legacy Wireless Messaging Systems that in this figure represents the
existing messaging systems like SMS. This part of the server network is quite important, since
the existing systems reach out for a large number of users.
Case: Messaging between two Terminals
To obtain a better understanding of the flow in the MMS Centre, an example that describe the
messaging between two terminals, is appropriate. Lets say that the user in some way makes
a MMS (see Chapter 4, that is to be sent to another terminal.
1. The user requests the message to be sent by using the WAP network to connect to the
2. The MMS Proxy Relay forwards the message to the MMS Proxy-Relay the receiving
terminal belongs to.
3. The MMS Proxy-Relay that the message is forwarded to, sends it to the associated MMS
Server where it is stored, while the MMS Proxy-Relay notifies the receiving terminal about
the incomming message.
4. When the connection is available the message is sent to the final target if that´s the way
the MMS Client on the terminal is implemented. The setup could also be so that the
terminial only retrieve a message when the user allows to.
As seen from the above the MMS Proxy-Relay is the essential part of the MMS Centre. Besides
doing the forwarding of the messages it also makes sure that the receiving mobile phone is MMS
Future network for UMTS and multimedia services
One of the important factors to ensure that MMS becomes a succes for the end users, is the
number of awailable services and how they are available. The services that are launched over
MMS will probably not be awailable for Internet users, so even though the user is at home, the
mobile phone has to be used to get the new fancy services.
Today the communicaton networks are built so that each network has its own services as illus-
trated in the figure below, where there only is limited connection between the different networks.
To reach a service in a different network there has to be a special gateway that can handle the
exchange of services. This could for instance be the Duet solution that TDC has made.
For the subscripers this is just a service, but there is a gateway between the PSTN and GSM
networks, that handles the billing system and other necessities to make the service function as
When building the UMTS networks there is a opportunity to start thinking in another way
when designing the networks and making the services. Since MMS in the end is about ser-
vices and how to access them, we think that such a reconsideration in a future perspective is
interesting when talking MMS.
The idea is to make a more common structure, where a service do not have to be dedicated
Figure 3.2: 
for a special network, as shown in Figure 3.2. To achieve this there has to be a change in
the way operators and service providers is structured today. First of all it will be easier for
content/service providers to make services available for a large amount of users, since they can
reach all different kind of users. But today we often see the operators as both access and ser-
vice providers, and in this model they will maybe only provide the access to the services. The
idea is a lot different from what we have today, but it will probably create some new business
models if it actually were implemented. But it is not done over night and since it is the oper-
ators who are building the new networks, they are the ones to decide how it will be in the future.
This is one of the big callenges in building the future UMTS and MMS networks, but it can
be the way to ensure that mobile multimedia services can be distributed to all parts of the
communications network, in a cost effective way. In the end it is up the the big players in the
market to agree on how the networks of the future will be.
The handsets and operating systems
The in built MMS Client described earlier in the network part, is a functinality of the operating
system, which makes it possible to send and receice a MMS on a terminal. The OS also has
to support the various applications that makes it possible to use multimedia on the terminal
and the terminal has to fulfill the hardware requirements to run the applications. This mean
there has to be a certain amount of awailable processing power, memory, sound enablers and a
suitable screen that finally can display MMS and its content. The mobile phones in use today
do not have all these features, so before the MMS can be widely used, a lot customers have to
by new phones that supports it.
On today´s market there are only two big developers of OS for mobile phones which is Symbian
and Microsofts Smartphone 2002. The systems do both have a MMS Client and they can
handle the necessary multimedia content and in generel they have the same features. The OS
play an quite important role, because it makes sure that the terminal works properly.
The symbians OS is developed by the Open Mobile Alliance, and is an open standard
which can be used on both 2.5G and 3G networks. Symbian that is owned by all the big man-
ufactors will have to compete with Microsofts solutions, that are new on the market for mobile
phones. The entrance of Microsoft on the market, will create new possibilities for manufactors
of mobile phones and it will ensure some healthy competition in the business.
Chapter 4 MMS Message development
We shall here look at MMS from a developer’s point of view. It will therefore be necessary to
understand what are the parts that make a MMS message. That will give an understanding
of what can be achieved with MMS, and it will give an understanding of what will have to be
taken into account when developing applications that deal with MMS messages. Both things are
important from a developer’s point of view. When we know what parts make a MMS message,
how do we then send this message? That is we need to encapsulate the different parts and make
sure that they are sent to the network. Next we will be looking into how to develop applications
that deal with MMS messages. The focus here will be on what facilities the developer can expect
to find in programming languages to support the MMS composition and sending.
MMS message components
On Figure 4.1 an example of the components of a MMS message can be seen. Basically a
MMS message consists of a number of multimedia objects and an optional presentation part,
which specifies how the multimedia objects are to be presented on the target terminal. The
presentation part is not mandatory, and if the message does not contain a presentation part it
is up to the target terminal how the message is presented  p. 10.
For the first generation of MMS messages image, text and audio multimedia types are supported.
In the future also video will be supported and possibly other multimedia types. The image
formats supported for the first generation MMS messages are JPEG, JFIF and GIF. And the
audio should be encoded as AMR (Adaptive Multi Rate) . In the message the ordering of
the multimedia contents are not significant. How the contents should be presented is up to
the presentation part. So in the first case the MMS application just have to make sure that
the contents is put into the message in some arbitrary order and the next thing is to specify a
presentation of the contents.
Two examples of presentation formats are WML (Wireless Markup Language) and SMIL (Syn-
chronized Multimedia Integration Language)  p. 10. Both are XML based languages and they
are quite simple to understand if one is familiar with other markup languages such as HTML.
Figure 4.1: MMS Components
In this survey we will focus on SMIL in order to get a feeling for what is possible and how to do it.
The presentation of the contents deals with the ordering, layout, sequencing and timing of
the multimedia objects. In SMIL the presentation is split up into slides. Every slide has some
contents composed of one or more of the multimedia objects. Here’s an example of a simple
SMIL document with just two slides taken from  p. 6.
<s m i l >
<meta name=” t i t l e ” c o n t e n t =” v a c a t i o n p h o t o s ” / >
<meta name=”a u t h o r ” c o n t e n t =”Danny Wyatt” / >
<l a y o u t >
<r o o t −l a y o u t width =”160” h e i g h t =”120”/>
<r e g i o n i d =”Image ” width =”100%” h e i g h t =”80” l e f t =”0” to p =”0” />
<r e g i o n i d =”Text ” width =”100%” h e i g h t =”40” l e f t =”0” to p =”80” />
</l a y o u t >
<par dur=”8 s”>
<img s r c =”F i r s t I m a g e . j p g ” r e g i o n =”Image ” / >
<t e x t s r c =” F i r s t T e x t . t x t ” r e g i o n =”Text ” / >
<a u d i o s r c =”F i r s t S o u n d . amr”/>
<par dur=”7 s”>
<img s r c =”SecondImage . j p g ” r e g i o n =”Image ” / >
<t e x t s r c =”SecondText . t x t ” r e g i o n =”Text ” / >
<a u d i o s r c =”SecondSound . amr” / >
</s m i l >
The SMIL document consists of a header section and a body section just like HTML. The
header section takes care of some global settings such as the layout for the different slides. In
the example it is decided that the image part of a slide should take up 80 vertical pixels, and
the text part should take up 40 pixels. In the body section the actual contents of the individual
slides are introduced. The par tag marks one slide in the message. The meaning of the tag is
that whatever elements is put in between the par tags should be rendered in parallel. First it is
important to notice that the duration of the slide is specified with the dur tag. In our example
the two slides are given 8 and 7 seconds respectively. The target terminal can overrule these
settings, so the developer cannot be sure that his specifications are used. Then the names of the
image, text and audio files are put into the relevant slides using the img, text and audio tags
respectively. That’s it! We have a simple slide show presentation. There are a lot of possible
options for the different SMIL tags and also there are more tags, but this is the SMIL basics
and should give a good feeling for what is possible and how to achieve it. For a more through
SMIL tag description the reader is referred to .
MMS message encapsulation
Sending MMS messages is, as mentioned in the introduction to this chapter, about message
encapsulation. When the message is composed the different components are encapsulated and
passed on to the operating system, which is responsible for passing it on to the network and
sending it with the appropriate protocol.
Messages can be encoded in many ways, but for the first MMS implementations the encoding
will be based on the WAP MMS encapsulation specified in . That document specifies the
different MMS messages for sending, notification, retrieving, reporting and acknowledging of
multimedia messages. Each message has a header and a body part. In the body part of the
MMS send message the actual content is put. It is not necessary for the developer to know
the actual encoding techniques because, as we shall see in the next chapter, the developer can
expect to find support for message encoding in programming languages. It is important to
notice, though, that the WAP MMS encapsulation provides the functionality of encapsulating
the different components – that is the presentation parts and the multimedia objects – into one
single unit, just ready to pass on to the operating system.
In future MMS versions other encapsulation techniques will also be supported . For
instance the MIME (Multipart Internet Mail Extensions) encapsulation technique used for mail
communication over SMTP (Simple Mail Transfer Protocol) will be supported. MIME provides
the same functionality as WAP MMS encapsulation, but all data is encoded in ASCII format.
For MMS to support email it is obvious to support the MIME encapsulation.
MMS application development
Now that we know about the components of MMS messages and encapsulation it is possible to
introduce actual techniques to develop applications that deal with MMS messages. One example
of such an application would be a standard MMS composing application on the mobile terminal.
Such an application will have to support the selection of the multimedia objects that the user
intends to send in a message, optionally some presentation options and then the encapsulation.
Another example is the MMS rendering application on the mobile terminal. But not only on
your mobile terminal will you use MMS applications. It is possible for companies to send MMS
messages to advertise their products. An application responsible for creating and sending these
advertisements would most likely run on a PC or a server. MMS news reports would be another
example, which also needs a running MMS application on a network connected PC or server.
MMS applications can in principle be developed in any programming language.
case of applications running on the mobile terminal the relevant operating system just has
to support the programming language. A popular operating system for new advanced mobile
terminals is the Symbian OS (Operating System). The Symbian OS supports C++ and Java
application development . Java is becoming a very attractive programming language for
mobile terminals, since the new mobile terminals are Java enabled so that anyone have the option
of developing, downloading and installing Java programs on their mobile terminal. Symbian
encourages development in Java and in  it is said that
”Supporting Java implies a manageable learning curve for a large number of third-
party developers, along with easy access to a wide range of tools, documentation,
books, technical support and training. Java code is generally easier to maintain than
C++ code while providing full support for object-oriented programming.”
In this report we shall focus on application development in Java as an example of what devel-
opment tools are available and how they can be used.
Nokia Java library
Nokia provides a Java library for MMS message development , and we shall here look into
how the composing and encapsulation activities described previously in this report are sup-
ported in the library. The following introduction to the use of the library does not focus on
any particular type of MMS application. Rather it presents the activities, which are necessary
for all MMS applications that need to send MMS messages. The library can be obtained free
of charge from Nokia developer’s forum . Also the library is documented on javadoc and the following description is based on the javadoc documentation.
The MMMessage is the class to use for putting the different parts of the message together –
that is both presentation and contents. First a lot of header settings have to be specified for the
MMMessage object such as message type, subject and receiver’s address. Next, it is possible to
add content to the MMMessage object. A content object is created with the class MMContent,
and then this object is added to the MMMessage. Here is an example of how a new MMMessage object is created and an image is added with MMContent. The example is not complete and
focuses on the conceptual understanding, but actually it is not much more complicated than this:
∗ ∗ r e a d some image i n t o b u f f e r ” i m g B u f f e r ” ∗ ∗
MMMessage mms = new MMMessage ( ) ;
MMContent img = new MMContent ( ) ;
img . s e t C o n t e n t ( i m g B u f f e r , 0 , i m g B u f f e r . l e n g t h ) ;
img . s e t T y p e ( IMMConstants . CT IMAGE GIF ) ; mms . addContent ( img ) ;
The other contents such as text and audio are added in exactly the same way as the image.
Also the presentation part is added this way. If a SMIL file already exists, it is read into a
buffer and added and the type is set to CT APPLICATION SMIL instead of CT IMAGE GIF.
In most cases the SMIL file would have to be created first, though. The application can easily
do that. In case of a message composer on the mobile terminal, the contents as well as the
duration of the different slides would be chosen by the user, so the application will have to
support the interaction in order to make the selections. Then the SMIL file can be created and
the MMMessage object can be created as shown in the example above.
Before the message can be sent the appropriate encoding has to take place. The Nokia Java
library supports the WAP MMS encapsulation encoding  described earlier. This is supported
through the MMEncoder class. Here’s an example of how the encoding takes place:
MMEncoder e n c o d e r = new MMEncoder ( ) ; e n c o d e r . s e t M e s s a g e (mms ) ;
e n c o d e r . e n c o d e M e s s a g e ( ) ; b y t e [ ] o u t = e n c o d e r . g e t M e s s a g e ( ) ;
And finally the message can be sent through the use of the MMSender class. The message is
sent to a MMSC which is responsible of storing and forwarding to the receiver. Here’s how to
MMSender s e n d e r = new MMSender ( ) ;
s e n d e r . setMMSCURL ( ” 1 2 7 . 0 . 0 . 1 : 8 1 8 9 ” ) ; s e n d e r . s e n d ( o u t ) ;
That’s it! Without the nasty details, of course. Now, another useful thing to assist in the
developing process is a MMSC (MMS Center) emulator. That enables developers to test
MMS applications without a live connection to a MMSC. The emulator can also be obtained
from Nokia developer’s forum. Here it is also possible to check out a simple but almost complete
example of using the Nokia Java library including the nasty details . The only thing missing
is how to send the message, but that is not very difficult either as shown here.
Chapter 5 Business
Business Model overview
The business model for MMS services closely resembles that of the business model for the leg-
endary SMS. However there are crucial differences. These differences are not only technological
but also financial and economic. The telecom industry is hedging its bets on MMS to get it out
of the woods and revive the spending boom of the go go 90’s. If that will be possible is yet to
be seen, but the signposts are clear that MMS is here to stay.
So how do we find out if the companies are right in predicting this star of future? One way could
be to perform a situational analysis on their current state of affairs. This information when pro-
cessed in the light of various advertisement blitz campaigns launched by these corporations give
us the general direction in which firms are headed. Although predictable in some ways these
findings do throw up some surprises such as the subtle difference in which the firms divide the
customer base in the global phone market. Which leads us to the market segmentation. This
market segmentation is a harbinger of things to come and in order to make sure we get it right,
interviews were arranged with leading lights of the MMS industry namely Nokia and Ericsson.
A SWOT analysis was performed to structure the “strength, weaknesses, opportunities and
threats and thus the state of the two major players in MMS market Nokia and Ericsson (Fig-
ure 5.2). This analysis primarily focuses on the MMS technology solutions offered by the two
firms. Other products and services when not related and are not considered. We focus on the
Danish market, which we believe represents and ideal test bed for both these firms. The reason
for choosing these two firms out of the multitude of players in the market was that among them
they share more than 40% of the global mobile phone market.
The various available MMS products and technologies are analyzed by use of a technique for
describing the situational assessment, the SWOT analysis (see Figure 5.1.
This overview represents the various possibilities and prospects of MMS. Although struc-
turally different in lots of ways such as target markets and niche area we can see from the above
analysis that both the firms are more or less affected in the same way by this new technology.
A firm’s business strategy can be thought of as a pyramid with attributes defining a firm’s
individuality forming the base. See Figure 5.3. Building on these attributes a company is able
to provide some tangible benefits to the customers. On the top of the pyramid lie the business
goals of the firm, which could be financial (amount of turnover etc.) as well as non financial
(e.g. market placement etc.). As not all attributes of a conglomerate lead to customer benefits
similarly not all benefits can be directly tied to firm’s final goals. Hence a smart company is the
one, which can wade out not only useless attributes but also channel the benefits to right type
of clientele in order to achieve its goals in the fiercely competitive world. This is the reason why
effective segmentation is so vital.
Conditions for successful segmentation are efficient classification (effective and identifiable)
and well-prepared evaluation (profitable and accessible). The base of any business market con-
sists of individuals each having different needs, desires, opinions, locations, tools, behaviors,
values etc. By using all these variables we can divide the market into various segments. These
segments tend to provide a black box in which various customers can be placed and character-
ized from. Once the segmentation is defined, customer groups are chosen and put into these
segments. Then a target marketing campaign can be used to position the firm in the eyes of
these specific customer groups.
Firms can perform segmentation a priori, i.e. before starting business in the field, or can choose
faster and more flexible ways such as adjustable segmentation. The selection depends on a num-
ber of factors such as: business field, previous experience, position in the market. One of the
most concrete ways of dividing the vast market into concrete segments is by using the existing
classifications, namely: product, technology and customers. After identifying and selecting the
customers, the firm should calibrate segmentation model to target the niche market in order to
maximize profits from the given set of resources.
In order to achieve a prototype of segmentation model for Nokia and Ericsson an exhaustive
study of their advertisement campaigns was undertaken by us. (Ericsson, Nokia). The
segments were then qualified according to their lif estyle (necessities/desires of customer groups)
and values (benefits the customers are looking for in order to achieve their desired lifestyle).
The segmentation model used by Nokia as seen in Figure 5.4 in its advertisement for MMS
is very broad and global in scope. The segments are not bound in the framework of cultural
precincts. In fact they try to address the customer base, which is common across cultures and
nations. An implicit assumption in these segments is that people having a particular lifestyle
have inherently the same values. Thus the segmentation model concentrating on lifestyle is
guaranteed to deliver superior results.
Figure 5.2: SWOT analysis of Nokia and Ericsson
The segmentation done by Ericsson as seen on Figure 5.5 on the other hand is more focused on
the individuals for them lifestyle and values are not only co-dependent but equally important.
Here the advertisements are more specifically targeted although they try to avoid stereotypes
For any business to be successful if there is one defining factor then it’s definitely pricing. This
more than true for the dog eat dog world of hi-tech mobile services. One of the major reasons that majority of Telco’s got burnt in yesteryears with WAP, was that the customers found the
prices of the services exorbitantly high compared to the services offered. Moreover one of the
reasons why SMS was such a big hit with the nebulous teenager market was that the prices were
more than affordable. The technological differences in SMS and MMS hinder the prospect of
using the same pricing strategy. In SMS the airtime (the time taken to upload and download
message from the server wirelessly) is negligible. Hence operators can run a profitable business
by charging the sender for the total airtime used. However in case of MMS the airtime is quite
significant and that leads to the problem of structuring the pricing. If the sender has to pay
for both upload and download time then the cost might become exorbitantly high, on the other
hand if the receiver has to pay for the message then she may end up paying for unwanted mes-
sages. This problem is further complicated by the numerous technologies such as GSM/GPRS
etc. available in the market, where the airtime could vary drastically and thus the cost.
Various solutions to this challenge of pricing have been proposed:
1. The Flat rate model: This model currently is being used in Norway. Users pay a fixed of ten NKR for sending a MMS no matter what kind of technology they are using. But this
flat not to mention high rate is seen to be an impediment in the acceptance of the MMS.
Thus it is proposed that by 2003 the prices should be lowered to more realistic levels of
2. The Airtime Model: This model used by Ideation House. In this model every user pays for the amount of airtime used by her i.e. a sender pays only for the upload time and
receiver for the download time. In order to make sure that a receiver is not bombarded
with unwanted messages a preview facility in the form of an SMS message informing him
about the type and content of the message is offered.
In order to further clarify the various questions about how companies comprehend MMS market
segmentation and users perception we tried to arranged some interviews with Ericsson and Nokia
in Denmark. An interview is preferred instead of a literature-based case study. This is because
of the enhanced flexibility that is possible when performing an interview, and the possibility to
clear any doubts and misapprehensions that may have arisen during the literature search.
However in spite of our very best efforts we couldn’t get an interview with an MMS repre-
sentative of Nokia. In order to make up for the lack of interview we made extensive study of
various documents available from the nokia. Moreover we received an email from Nokia
answering the questions we had scheduled for the interview, see Appendix B. However this
email served a limited purpose, due to reluctance of Nokia to divulge bulk of information about
products and process, as they are deemed confidential. Please refer to Appendix B for further
Case Study: Ericsson
A meeting with Ari Lehtonen was organized at DTU October the 11th at 15.00. This meeting
was quite fruitful and gave a clear understanding of Ericsson’s position on MMS. All following
information provided regarding Ericsson comes from interview with Ari Lehtonen.
Ericsson is one of the world’s top10 suppliers of telecommunications gear. It has 12% of Europe
GSM handsets market, which makes about 20% of its revenue. Other 80% of revenue comes
from providing platforms to various telecommunication operators (see Figure 5.6. Here Ericsson
ranks no.3 in the world. Ericsson sees itself as more platform-solution provider for operators as
Figure 5.6: Ericsson?
opposed to Nokia’s concentration on customer terminal market. Lately Ericsson has merged its
handset unit with Sony to form Sony Ericsson Mobile.
The major end user market segment for Ericsson as explained by Ari Lehtonen are teenagers,
”They have the least resistance to new technology and are already used to using sms in very high
proportions”. This corresponds to the market segmentation, we got from the study of various
advertisement campaigns by Ericsson (see section 5.2.1). A classic scenario can be a party that a
teen wants to tell her friends about. A picture of people having fun will be a clinching argument,
in such a scenario. However Ericsson as such is not making any publicity or marketing for MMS
its left up to the service providers to create mass-market awareness about the product. The
major focus is on selling the infrastructure to the service providers and the terminals for end
users are the responsibility of SonyEricsson.
Ericsson chooses to concentrate on providing complete and flexible platform for any kind of
services ’anytime anywhere’. In terminal market this shift can be seen as they try to create
awareness for ’Sony Ericsson inside’ terminals with powerful engine. The task of designing out-
looks and exact functionality can then be left to other firms who want to buy this chip. This is
supposed to work as ’Intel inside’ conception in PC world.
As far as operators are concerned all MMS technologies are merging into an unified IP platform
solution thus there is no sharp market segmentation here. This key development of providing all
functionality on a single common platform will enable operators to mix and match the equip-
ment from different vendors. In order to achieve this Ericsson has teamed up with other market
leaders such as Nokia, Motorola etc.
Mobile phones today are more of a necessity than an embellishment. Long gone are the days
when only rich and busy needed and could afford a cellular phone. Thanks to falling prices not to
mention the size these gizmos of yesterday have truly become a mass-market commodity. A lot
of credit for this does go to companies such as Nokia and Ericsson, which have been instrumental
in creating niche market for these devices. Today it’s not uncommon to see everyone from blue haired teenagers to elegantly dressed businessman sporting there own particular brand of phone.
Ericsson envisions that these current customers will seamlessly move over to the new service
as they see great advantages and facilities being offered by new MMS technologies. Moreover
they are hedging their bets on the fact that MMS will be a profitable business proposition all
the way along the business chain, delivering profits to operators, manufacturers etc. However a
lot depends on the Pricing where pricing includes both
1. Price of service
2. Price of handsets
The prices of service are very much dependent on the provider and cannot be exactly predicted
as of this moment. Nevertheless the prices of handsets, is bound to come down, as they become
a mass-market commodity.
In order to resolve customer privacy and security issues. Ericsson is putting lot of emphasis on
what is called a “Trusted third party” such as PBS[?]. This is because the users are reluctant
to trust their service providers unlike in the case of banks. A reason being that financial institu-
tions are governed by much strict laws, which make sure not even one dollar goes unaccounted.
The laws and regulations for things like digital signatures are already in place and should not be
very difficult to develop a further regulatory framework. Hence these financial institutions offer
something very vital in today’s volatile market namely Trust. Moreover options such as the cus-
tomer cannot be traced etc. can be set on the phone in order to protect the customer anonymity.
As far as creating a market-awareness for MMS is concerned, this job is left to the service
providers. The reason being that Ericsson after facing huge losses and increasing competition
from other manufacturers such as Samsung etc. in past year wants to focus on its core strength
i.e. providing infrastructure to the service providers.
To an untrained eye underlying technology in MMS will seem almost similar to that offered
by SMS with some visual enhancements. However this not entirely true cellular infrastructure
providers in general and Ericsson in particular faces numerous challenges down this road. The
biggest obstacle is technologies incompatibility due to non-mature standards. Thus Ericsson
along with other market leaders is going for rapid standardization: For e.g. Nokia phones will
be able to work with Ericsson’s infrastructure etc.
Another challenge, which has been mentioned again and again, is non-availability of enough
MMS phones. In order to make sure that MMS has a smooth start initially facilities such as
the ability to view the picture on the Internet and by email will be provided. This facility will
till the customer base of MMS enabled phones is big enough to be carried by its own momentum.
Ericsson is not involved in development of contents for the so called fourth or application layer.
Its up to providers to provide the applications they think will bring them the most amount of
revenue. After a while though they expect lot of individuals and other private firms to kick in
as the phones catch up. It should not be difficult for these developers to develop products since
Ericsson and others plan to make the API’s and other standards open source. However unlike
other players such as I-mode in Japan Ericsson is not planning any revenue sharing with the
developers as such.
Case Study: Nokia
Nokia is the world leader in mobile communications; it’s the number one supplier of mobile
phones in the world and a leading supplier of mobile, fixed and IP networks. Nokia employs
60 000 people worldwide and has 33.4% international mobile phone market which makes 2/3 of
company’s revenue. Nokia has an especially strong position in the European market.
Mobile Internet in Nokia’s understanding goes along with messaging and these two terms are
united into conception of ’Mobile internet and messaging’. While messaging is understood in
broad sense – including text, voice, video and data – i.e. abstract message.
Lately Nokia moved from only mobile phones and operators market into services market and try
to provide solutions for everything what relates to mobile communications and services. ”Nokia
will support the Operators in monitoring and upgrading network capacity when required.” (see
Appendix B). It’s also important to stress that Nokia is paying a lot of attention to future
services. The most important one of which is MMS as it promises to deliver profits here and
now. Hence the marketing slogan by Nokia: “Message is the medium”.
Main thrust area for Nokia do remain the end users or customers “Nokia is using MMS as an
end user benefit – see for instance ads for Nokia 7210 and 6610.” (Appendix B)
Nokia uses an Abstract User profile – that’s flexible way to address all users equally according to
their needs and this is achieved by adapting (or optimizing) user interface to requirements. On
being quizzed about the customer profile which Nokia is going after the response was “Any type
of users generally interested in new technology and services” (Appendix B). Using this Abstract
User Profile it’s possible to target exactly the desired segment of the market, criterions such as:
user’s preferences, lifestyles, modes of access, attributes, and statistical parameters are used for
modelling the subscriber’s behavior and even permissions on sharable data.
Nokia makes a rich mobile internet segmentation according to different criteria such as lifestyle,
services and an adopted personal User Interface (UI). The personalized user interface makes it
easier for the companies to provide different products with a different look and to overcome the
short PLC problem.
“MMS is composed almost like a SMS – but with more options and possibilities. You can already
test this today in several Nokia products – try for instance Nokia 7650 in the local shop. Message
is passed on to MMS-center by either using CSD (Circuit switched Data – regular Data call) or by GPRS. MMS is passed on to the MMS using the WAP stack protocol that is also being used
when browsing using WAP browser.” (Appendix B).
Business Analysis and conclusions
Two major players, two-target customer groups, two marketing strategies one goal; maximize
profit. So how do these firms fare? In this section we look at how these two global behemoths
compare to each other.
Figure 5.7: Industrial comparisons
As we can see from Figure 5.7 that although they converge on many important facets of
introducing MMS in the market, some differences still persist. Especially in their view of the
market, for Nokia primary focus are the end users and it’s willing to go all the way in order to
maintain and improve its market share. The extent of Nokia’s dependence on this market can be
gauged from the fact that its even willing to lean on the providers to subsidize its phones, “they
will probably subsidize phones to ensure a fast renewal rate and a quick introduction of MMS
capable phones in the market”. On the other hand Ericsson is focusing on its core competencies
mainly providing infrastructure solutions to the providers, which it believes in turn, will fuel the
growth of its mobile phones.
This perceptible difference in core potency has a bearing on the technological considerations
and market segmentation by the two firms. While Ericsson qualifies its customers based on
“walled garden” approach of lifestyles and values, Nokia is believes in the philosophy of “Let
every flower bloom” and focuses on solely on Lifestyles.
Here we propose the following model that we believe have the highest potential for success.
Proposed Pricing strategies
The segmentation in Figure 5.8 is a combination of segmentation from both Nokia and Ericsson.
We believe that these segments are broad enough to cover majority of the market. Moreover
they are not too broad so as to loose focus of what exactly we are trying to sell in the market.
Figure 5.8: Proposed segmentation model
Proposed Pricing strategies
After exhaustive study we recommend following effective pricing strategies. The ”preview con-
cept” is quite novel as it protects users from unsolicited messages thereby making sure that the
user does not have to pay for the messages she does not want.
Moreover we support the ”Flat rate” model of billing the customers, because otherwise the users will end up paying variable rates depending on the connection they have ref: ”Business
Model overview” on page 2. People don’t know difference between connection possibilities and
they don’t want know and don’t care. Moreover different pricing techniques will be extremely
confusing and will take a Herculean effort to explain, leading to higher advertisement and public
 UMTS System Integration L.M. Ericsson A/S Ari Lehtonen, Project Manager.
 http://www.inaphone.com Brian Larsen: http://www.ideationhouse.com.
 ISSN: 007-7135. Businessweek:Pg, 48 November 4 2002.
 Interest: MMS Composer and Album Our ”Memphis” system also includes Subscription
Server & MMS Content www.alatto.com.
 http://mmsc.dk/ and http://www.computerworld.dk/default.asp?Mode=2&ArticleID=16972.
 http://mobile.lycos.de/mobile/local/mms/pics/mms pic1.jpg.
 http://webapp.etsi.org/exchangefolder/ts 123140v050400p.pdf.
 http://www1.wapforum.org/tech/documents/WAP-205-MMSArchOverview 20010425-a.pdf.
 http://www1.wapforum.org/tech/terms.asp?doc=WAP 205-MMSArchOverview-20010425-a.pdf.
 http://www1.wapforum.org/tech/terms.asp?doc=WAP-205-MMSArchOverview-20010425-a.pdf. Chapter 6.1.
 figure 2 http://www1.wapforum.org/tech/terms.asp?doc=WAP-205-MMSArchOverview-20010425-a.pdf. Page 12.
 http://www1.wapforum.org/tech/terms.asp?doc=WAP 206-MMSCTR-20020115-a.pdf.
 http://www1.wapforum.org/tech/terms.asp?doc=WAP 206-MMSCTR-20020115-a.pdf.
 http://www1.wapforum.org/tech/terms.asp?doc=WAP 209-MMSEncapsulation-20020105-a.pdf.