My colleague Seth Benton thinks my blog on social networking was wrong. Here's what he has to say.
While I usually agree with DSP DesignLine editor Kenton's blogs, his last blog Social networking: next killer app in ULC handsets? got it wrong. Enough that I called him to argue about it. While discussion usually results in spirited debate and a meeting of minds, this time neither of us would budge. He was gracious enough though to let me air my dissenting view on his blog, so here goes.
Our biggest point of disagreement is how fast full-fledged social networking will arrive in truly ultra-low-cost (ULC) phones. While Kenton believes we're still a long way off, I argue it's only a few short years away. While the cost of features required for full-blown social networking (image/video capture and display, multimedia messaging, etc.) is still far out of reach of the world's poorest, accelerating demand for these features in low-end feature phones should create economies of scale that make it possible.
Demand for feature phones in emerging markets is already surprisingly high. Nokia's latest four phones for India and China, priced between $78-$140, are representative of this trend. As the upwardly mobile middle classes of India, China, and elsewhere add to the feature phone consumption of Europe and North America, economies on scale will continue to drive the price of features down.
The emerging middle classes probably won't be able to do it on their own though. To create the economies of scale needed to turn ULC phones into feature phones as quickly as I predict, ULC consumers need to start buying more features. Currently, the only "must-have" feature being designed into ULC phones is FM radio. To convince ULC consumers they need more, a killer app is needed.
While it remains to be seen what that killer app may be, social networking is an obvious bet. As Kenton mentioned in his blog, "Demand is already there… …MyGamma, one of the 30+ mobile social networking startups, reports that most of its 2.5 million users are in developing countries in Asia and Africa."
Mobile social networking is also evolving at a rapid clip. Between the big three social networks (Facebook, Myspace, and Bebo) going mobile, and the large number of startups, at least a handful of companies will get it right and grow existing demand.
Finally, as any member of a social network knows, social networking is a highly addictive drug. And one thing high and low income people the world over have in common is that they always find money for drugs.