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					            Mobile Entertainment


T-109.551 Research Seminar on Telecommunications Business II




                           Min Chen
                 Computer Science Department
                Helsinki University of Technology
Table of Contents


1     Introduction ....................................................................................................................... 4
2     GSM System Overview ..................................................................................................... 5
    2.1      GSM Network Architecture ...................................................................................... 6
      2.1.1          Mobile Station ................................................................................................... 6
      2.1.2          Base Station System .......................................................................................... 7
      2.1.3          Network and Switching Subsystem ................................................................... 7
    2.2      Radio Resources ........................................................................................................ 7
    2.3      Network Services....................................................................................................... 8
      2.3.1          Teleservices ....................................................................................................... 8
      2.3.2          Data Services ..................................................................................................... 8
      2.3.3          Supplementary Services .................................................................................... 9
3     Short Message Services (SMS) ....................................................................................... 10
    3.1      Technical Overview................................................................................................. 10
      3.1.1          SMS infrastructure........................................................................................... 10
      3.1.2          SMS Transmission Protocol ............................................................................ 11
      3.1.3          Message Delivery Retry Schedules ................................................................. 11
    3.2      General SMS Features [5] ....................................................................................... 12
    3.3      SMS Applications.................................................................................................... 13
    3.4      Usability Analyses ................................................................................................... 14
4     Wireless Application Protocol (WAP) ............................................................................ 15
    4.1      Technical Overview................................................................................................. 15
      4.1.1          WAP Model ..................................................................................................... 15
      4.1.2          WAP Gateway ................................................................................................. 16
      4.1.3          WAP Protocols ................................................................................................ 17
    4.2      WAP 2.0 .................................................................................................................. 20
    4.3      JAVA 2 MICRO EDITION (J2ME) ....................................................................... 20
    4.4      WAP Applications ................................................................................................... 21
    4.5      Usability Analysis ................................................................................................... 21
5     3G Technologies.............................................................................................................. 23
    5.1      3G Network Standards ............................................................................................ 23
    5.2      Enabling Technologies ............................................................................................ 24
    5.3      Applications............................................................................................................. 25
    5.4      Usability Analysis ................................................................................................... 25
6     Mobile Entertainment Market Analysis .......................................................................... 26

                                                                    2
    6.1      Mobile Entertainment Business of Today ............................................................... 26
    6.2      Revenue Models ...................................................................................................... 26
      6.2.1         Mobile Entertainment Value Chain ................................................................. 26
      6.2.2         Revenue Sharing.............................................................................................. 28
      6.2.3         Licensing ......................................................................................................... 28
      6.2.4         Retail ............................................................................................................... 28
    6.3      User Groups ............................................................................................................. 29
    6.4      Marketing Strategies ................................................................................................ 30
7     Conclusions ..................................................................................................................... 32
8     References ....................................................................................................................... 33




                                                                    3
1    Introduction


Mobile entertainment is a rapid growing segment of the mobile communications industry and
evolves into the leading value-added mobile services. Mobile entertainment refers to
entertainment products run on wireless networked, portable, personal devices. The term
“mobile entertainment” excludes mobile communications like person-to-person SMS,
voicemail, and mobile commerce applications.


The mobile entertainment services utilize Internet technologies, mobile phone technologies
and popular entertainment contents to offer amusement to subscribers. Mobile games, ringing
tones, pictures, and music are examples of the type of mobile entertainment services already
existing today.


The main purpose of this report is to introduce and analyze the mobile entertainment
technologies and relevant market issues. The information in this report is focused specifically
in the field of mobile entertainment services. It is beyond of the scope of this report to cover
every aspect of the supporting technologies and related business issues. The structure of the
report is as following:


Chapter 2 to 5 introduces the mobile telecommunications technologies that support the
evolution of mobile entertainment, beginning with GSM network architecture, followed by
SMS, WAP, and 3G related to mobile entertainment. The technical overview laid the
foundation for discussion of related technologies, key applications, and usability issues
associated with delivery of effective mobile entertainment services.


Chapter 6 presents market analysis for mobile entertainment services. The analysis of revenue
models explores various means of generating revenue from mobile entertainment industry.
The analyses of users provide insight into marketing strategies. Finally, discussion of
effective marketing strategies provides vision of achieving success in the market.


Chapter 7 presents the conclusion.




                                               4
2   GSM System Overview


Nowadays mobile telecommunication technologies are evolving fast. There are different
popular wireless networks exist such as AMPS, GSM and CDMA. The AMPS is the first
cellular system, developed in 1970s. This first-generation analog system has been considered
a revolutionary accomplishment and is still widely used in U.S. However, the GSM (Global
System for Mobile Communications) system is currently a globally dominant system and as
the basis for approximately 70% of future 3G networks. Therefore, the GSM is chosen as the
prime example of mobile network architecture and functionality. This section briefly
introduces the GSM network architecture.


At the beginning of the 1980s, the lack of a common mobile system was a general worldwide
problem. With the increasing needs of unified standards and inter-working telecommunication
services, the Conference Europeenne des Postes et Telecommunications (CEPT) founded the
Groupe Speciale Mobile in 1982 to specify a common system for European mobile networks.
The GSM system name arose since then. The first GSM standard was published in 1990 and
was subsequently widely adopted.


GSM is a digital wireless network referred as second-generation system. GSM provides a
common set of compatible services and capabilities to all mobile users across Europe, as well
as countries in Africa, Asian, Australia, and Latin America. The U.S. and Japan adopted other
types of systems, which are not compatible with GSM. The Third Generation Partnership
Project (3GPP) now governs the standard. Today, GSM technology is in use by more than one
in ten of the world‟s population and it is said that at the end of 2002 there were 787 million
GSM subscribers across the 190 countries of the world. The growth of GSM continues
unabated. It is predicted that global GSM subscribers will break the one billion mark. [8]


One of the key factors for the success of GSM is that the GSM is a growing and evolving
system that offers expanded services. GSM networks will continue to dominate and
eventually evolve into more sophisticated 3G networks. The GSM family consists of today‟s
GSM, General Packet Radio Service (GPRS), Enhanced Data rates for GSM Evolution
(EDGE), and third generation GSM services (3GSM). Together the GSM family provides a
flexible platform and an evolutionary path that enables network operators to offer a
potentially limitless range of revenue generating services, meeting the ever-growing needs of
their customers worldwide.
                                               5
This section presents a brief introduction to the network system, condensed with particular
reference to aspects relevant to wireless entertainment.


2.1     GSM Network Architecture

The GSM network system consists of three primary functional entities, the Mobile Station
(MS), Base Station Subsystem (BSS), and Network and Switching Subsystem (NSS). Each
entity includes subsidiary components integral to their functionality. Figure1 illustrates a
generic GSM architecture.




                                 Figure 1 GSM architecture [3]




2.1.1    Mobile Station

The mobile station consists of two parts: the mobile equipment (ME) and the Subscriber
Identity Module (SIM). Each of which contains a unique identifier known as the International
Mobile Equipment Identity (IMEI) and International Mobile Subscriber Identity (IMSI),
which facilitate subscriber mobility between ME.
The ME contains the non-customer related hardware and software specific to the radio
interface. When the SIM is removed from an MS, the remaining ME cannot be used for
reaching the service except emergency calls.




                                               6
The SIM is a “smart card” that contains the identification number of the user and a list of
available networks. It communicates subscriber information to the system and is protected
with a personal identity number (PIN).

2.1.2    Base Station System

The BSS connects the ME and NSS. It also consists of two components, the Base Transceiver
Station (BTS) and Base Station Controller (BSC). The BTS contains transmitter, receiver, and
signaling equipment that responsible for contacting MSs (defining cells, the radius of radio
coverage for each subsystem, and exchanging radio-link protocol information with the Mobile
Station). The BSC supports radio channel allocation/release and handoff management. The
BSC is responsible for switching function in the BSS providing the link between mobile
station and Network Switching Subsystem.

2.1.3    Network and Switching Subsystem

The NSS supports the switching functionality, management of subscriber profiles and
tracking of handsets mobility within the network. The controlling entity is the Mobile
Switching Center (MSC). This component provides mobile stations access to PSTN and
ISDN networks.


There are various register contain information integral to the functionality of the network. The
Home Location Register (HLR) contains a permanent register of subscriber information. In
addition, the HLR also keeps track of the current location of mobile station. The Visitor
Location Register (VLR) is a database that contains information about subscribers currently
being in the service area of the MSC/VLR. The VLR carries out location registration and
updates. The Equipment Identity Register (EIR) responsible for checking the IMEI that
assigned to every piece of mobile equipment to determine the validity of the mobile
equipment. The Authentication Center (AC) provides security information to the network for
verifying the SIM cards.


2.2     Radio Resources

The GSM radio link uses both Frequency- and Time-Division Multiple Access
(FDMA/TDMA) technologies for dividing frequencies. The 935-960 MHz frequency bands
are used for the downlink signal and 890-915 MHz frequency bands are used for the uplink
signal, though some configuration operate in 1800 and 1900 MHz bands. The frequency band
is divided into 124 pairs of frequency duplex channels with 200-KHz carrier spacing. Carrier
frequencies are further divided into time slots (bursts). Every burst contains 148 bits (0.546
                                               7
msec), followed by 8.25 bits (0.031 msec), which make total 156.25 bits (0.577 msec). A
TDMA frame consists of eight bursts.


Depending on the information carried by a time slot, there are two types of logical channels
are defined. They are traffic channels and control channels. The traffic channels include full-
rate and half-rate traffic channels, which are intended carry user information, either speech or
data. The control channels include common control channels, dedicated control channels and
broadcast channels, which are intended to carry signaling information. For example, the
random access channel within common control channels is used for initiating a call. The
standalone dedicated control channel is used only for signaling and for short messages. The
broadcast channels are used by the BTS to broadcast information to the MSs within its
coverage area.


2.3     Network Services

The International Telecommunications Union (ITU) is an international organization that
enables governments and the private sector coordinating global telecommunications networks
and services. It divides telecommunications services into the following three general
categories: teleservices, Data services (or bearer services), and supplementary services.

2.3.1      Teleservices

Teleservices focus on voice-oriented services. These comprise voice transmission, message
services, and basic data communication with terminals from the PSTN or ISDN (e.g. Fax).
However, the main service is telephony, including emergency calls. A useful service wherein
is Short Message Services (SMS), which enable mobile subscriber to transmit text messages.
The SMS will be elaborated in later section. Another non-voice teleservice is group 3 fax. In
this service, because it is used for data transmission, there has to be a provision of bearer
service.

2.3.2      Data Services

Data services, or bearers, come into use when data transmission services are needed. The
original GSM bearer services are implemented using only 1 timeslot per channel, allowing
data transmission rates up to 9.6 kbps (14.4 kbps with some providers). There are different
types of data services available, transparent or non-transparent services, synchronous or
asynchronous data transmission. A transparent service employs re-transmission mechanism
for error correction and flow control, whereas a non-transparent service does not employ the
re-transmission mechanism and does not recover lost data in case of errors. In synchronous
                                               8
transmission, the bit flow transmitted through network is continuous and both the transmitting
and receiving terminals are bit synchronized. Multimedia applications are examples of this
type of services. However, in a synchronous transmission, the bit flow transmitted through
network is not continuous. Start and stop bits are needed by the transmitting and receiving
terminals in order to operate at the same speed. File transfer and e-mail are examples of the
type of asynchronous services. Data services represent considerable growth nowadays due to
advancements in mobile data transmission technologies. Many of these technologies together
form the basis for delivering mobile entertainment services. These technologies will be
discussed in later sections.

2.3.3   Supplementary Services

Supplementary services offer enhancement for the basic telecommunication services. These
services may vary from provider to provider. Typical services include call barring, call
waiting, call forwarding, and caller identification. The range of supplementary services is
likely to expand as service providers seek to enhance the functionality of mobile stations.




                                               9
3     Short Message Services (SMS)


The SMS is a service that enable mobile subscriber to send and receive short text messages on
their mobile phones. The messages can be received at any time even during data or voice
transmission. The first short message was sent in December 1992 from a PC to a mobile
phone in the Vodafone GSM network in UK.


The GSM SMS provides a connectionless transfer of message with low capacity and low-
performance. Each message can contain up to 160 characters of Latin alphabets, or 70
characters of non-Latin alphabets such as Arabic and Chinese. To allow messages longer than
160 characters, SMS concatenation and SMS compression are defined in the GSM standards.
Over the past few years, the volume of SMS messages has increased significantly. This
implies the immense value of service provision and revenue generation.


This section presents a technical overview, applications, and usability analyses that specific to
implementing entertainment solutions.


3.1     Technical Overview

3.1.1      SMS infrastructure

The basic mobile network infrastructure for SMS is illustrated in figure 2.



                                       SMS-GMSC
      MS             SM-SC             SMS-IWMSC                MSC             MS
                                       SMS-IWMSC


                                  Figure 2 SMS infrastructure



The above diagram illustrates how a short message is transferred from the origination point to
the destination point wherein a MS are defined as two end points. A MS can be a mobile
phone, a computer or any other device capable of sending and receiving short messages in
SMS format. As shown above, a MS originate a short message. The message is initially
delivered to the Short Message Service Center (SM-SC). SMS is a store-and-forward service.
Short messages cannot be sent directly from the sender to the receiver without passing

                                               10
through SM-SC. The SM-SC is a routing and storage facility, queuing messages on a first-in-
first-out (FIFO). The SM-SC is connected to the network through SMS Gateway Mobile
Switching Center (SMS-GMSC). The SMS-GMSC locates the current MSC of the message
receiver and forwards the message to that MSC. The MSC broadcasts the message to the base
station system, and the base transceiver station (BTSs) page the destination MS and finally
deliver the message to the MS. This is referred to mobile terminated messaging because the
MS sends the message to the SM-SC.


In mobile originated messaging, an MS receives a message from the SM-SC. The message is
initially delivered from a MS to a SMS inter-working Gateway Mobile Switching Center
(SMS-IWMSC) and then through the SM-SC to recipient. The recipient of the message can be
a MS, a fax Machine, or a PC. The logic paths taken by mobile originated and mobile
terminated messaging are presented as follows:


Mobile originated (MO): MS  MSC  IWMSC  SM-SC  MS
Mobile terminated (MT): MS  SM-SC  GMSC  MSC  MS


The SMS-IWMSC works as a switching node for routing mobile originated messages.
Whereas, mobile terminated messages are routed through the SMS-GMSC. These
components can be integrated with SM-SC to reduce maintenance and signaling
requirements.


The mobile network‟s SS7 signaling used for SMS are the Slow Associated Control Channel
(SACCH) and the Slow Dedicated Control Channel (SDCCH), depending on the status of the
MS when the short message is being delivered. The SACCH is used to deliver short messages
when the MS is engaged with a voice or data call, while the SDCCH is used when the MS is
not in use. The process typically takes 5 seconds or less from origin to destination.

3.1.2   SMS Transmission Protocol

There is no standard protocol for SMS transmissions. The Short Message Peer to Peer
Protocol (SMPP) is most commonly employed, followed by the Universal Computer
Protocol/External Machine Interface (UCP/EMI).

3.1.3   Message Delivery Retry Schedules

Each SM-SC has a retry schedule that defines the schedule when the message cannot be
immediately delivered to intended recipient. Retry schedules are important because between
half and three-quarters of all first time short message delivery attempts by a SMS Center
                                              11
typically fail [4]. Therefore, the retry schedule requires a balance of efficient delivery against
deploying scarce signaling and processing resources.


The retry schedule initiates subsequent delivery attempts on a time or event-driven basis.
Time-driven retry schedules simply attempt delivery at set time intervals regardless the reason
of failure. Event-driven retry schedules tailor the retry schedule according to the reason of
failure. Thus event-driven retry schedules are more efficient than time-driven schedules. For
temporary errors such as „absent subscriber‟ or „memory capacity exceeded‟, the event-driven
retry schedule may retry continuously. However, for permanent errors such as „teleservice not
provisioned‟ or „unknown subscriber‟, delivery attempts will be abandoned and the message
is discarded.


When the short message recipient becomes available, the SMSC is notified (there is no
notification when a MS become temporary unavailable and then available in the same cell).
The SMSC will then transfer the message to the destination MS. If the delivery is successful,
the MS will acknowledge the SMSC. Therefore, the SMSC can release valuable resources. In
the case that a short message is delivered smoothly from sender to recipient, the average
delivery time is approximately 3 to 10 seconds.


3.2   General SMS Features [5]

Concatenation
Concatenation is the process of concatenating several individual standard short messages into
a group to form a long message. Up to 255 short messages can be concatenated. When
concatenation is used, each short message contains additional information such as Data
Header Indicator. It is used to indicate the use of concatenation, the number and order of the
set of concatenated messages.
This enables the receiving application to correctly reassemble the concatenated short
messages. If any messages in the concatenated sequence are lost, there is no automatic
retransmission mechanism. Concatenation can be used for transferring messages contain more
characters than standard. However, it is impractical for high volume information transfer.


Compression
With compression, the extra characters can be compressed into a single short message.


Binary messaging


                                               12
The SMS can be configured in character or binary mode. Binary messaging enables more
efficient transfer of data.


Encryption and security
To ensure that short messages are not corrupted or intercepted, data integrity is incorporated
into the GSM standard. Short messages are routinely encrypted over the radio path between
the MS and BSS using the IA5 encryption algorithm. IA5 is sufficient for most routine short
messaging requirements. For optimal security in applications such as mobile banking, end-to-
end encryption is advisable between the sending and receiving Short Message Entities.


Billing
Billing is generated using the transfer log recorded by SMSC. Each message has a billing
reference associated with it, which tells the billing system the rate that particular message
should be charged for. Generally, the originator is responsible for the charge, except in cases
where “push” services initiated by a server are billed to the subscriber who receives them.


Different alphabets support
There are two different GSM SMS alphabets: UCS2 and the GSM 7-bit Default Alphabet.
UCS2 (Universal Multiple Octet Coded Character Set 2) is derived from the ISO standard
ISO/IEC10646-1. UCS2 incorporates all major languages around the world. The 7-bit Default
Alphabet is derived from the ASCII character set. Each Latin character use 7 bits to code,
whereas the non-Latin characters require 16 bits. This results each non-Latin short message
has a maximum length of 70 characters and such applications may therefore need to use
compression or concatenation for greater information transfer. In addition to UCS2 and the
default 7-bit alphabet, GSM specifies also eight bit (binary) data.


3.3    SMS Applications

The vast majority of SMS usage is accounted for by consumer applications. These
applications are becoming ever more abundant, including simple person-to-person messaging,
voice mail, fax, unified messaging, games, ringtones, pictures, voting, gambling, information
services, mobile banking etc.


Games
Games are a potentially huge service involving interactivity that many people see as being a
key application for future mobile networks. Taking the i-mode service from NTT DoCoMo as
an example, over half of the total usage volume is orientated to entertainment services with a
                                               13
quarter of i-mode users subscribing to games services. Other services that are popular include
ringtones, pictures, and horoscopes. [6]


Pictures
Picture messages are quickly gaining popularity, representing the earliest stage of mobile
evolution to a more visual interaction. The images are simple bitmaps.


Unified messaging
The ideal of Unified Messaging is to provide a single interface for accessing various
messages such as fax, voice mail, short messages, email etc.


Ringtones
Custom ringtones downloaded via SMS are becoming increasingly popular. Ringtones are the
tunes that the phone plays when someone calls it. The service enables phone users to be able
to change their ringtone to distinguish from others. The most popular ringtones varies very
considerably but tend to be popular music, television or film theme tunes.


3.4   Usability Analysis

SMS user interfaces are tedious and difficult to manipulate. The MMIs (Man Machine
Interfaces) are not standardized, resulting in varying usability among handset interfaces.
Content delivered via the SMS medium are generally text based, but can use also graphics
where service providers have installed the 8-bit Data Coding Scheme. In each message,
content is restricted to 160 character of Latin alphabets, or 70 characters of non-Latin
alphabets. Text layout cannot be controlled effectively due to differences in screen sizes
among various mobile devices. Minimizing transactions with the content server, configuring
servers for maximum efficiency is necessary.


SMS is a commercially important technology at present for a variety of applications. A sound
business case exists for SMS games at present despite inherent restrictions due to the
technology‟s immense popularity and user base. However, a user-centered design approach is
essential to ensuring the commercial viability of SMS entertainment services. As the presence
of other more flexible technologies improve the richness, reliability, connection speed, and
possibilities for mobile entertainment, the relevance of SMS will decline.




                                               14
4     Wireless Application Protocol (WAP)


The Wireless Application Protocol is a de facto world standard for the presentation and
delivery of wireless information and telephony services on mobile phones and other wireless
terminals. [9] The purpose of the WAP is to empower mobile user to access and interact with
information and services easily and fast.


In June 1997, Ericsson, Motorola, Nokia, and Phone.com founded the WAP Forum. Now the
WAP forum has more than 400 members. Most handset manufacturers have committed to
WAP-enabled devices, and many mobile operators have joined the WAP forum. The WAP
Forum has drafted a global wireless protocol specification for all wireless networks, various
industry groups and standards bodies. This specification enables manufacturers, network
operators, content providers and application developers to offer compatible products and
secure services on all devices and networks, resulting in greater economies of scale and
universal access to information. [9] The WAP specification extends and leverages existing
technologies, such as IP, HTTP, XML URLs etc.


This section briefly introduces the WAP model, the WAP protocol stack, WAP applications
and usability analysis.


4.1     Technical Overview

4.1.1    WAP Model

The WAP programming model is based on the Web model with a few enhancements (the
most significant enhancements are Push and WTA). This provides benefits including a
familiar programming model, a proven architecture, and the ability to leverage existing tools
(e.g. Web server, XML tools).




                                             15
                             Figure 3 WAP Programming Model [9]



As illustrated in figure 4, the nominal use of WAP will include Origin Server/Web server,
WAP proxy, and WAP client. The process for sending and receiving data using WAP is
summarized below:
    1. A user agent initiates a request (URL) in binary format and sends it to a WAP proxy
         server.
    2.   The WAP proxy server parses the request, translates it into text format HTTP request,
         and forwards it to the Origin server. The origin server is a Web server.
    3.   The Web server parses the request and issues a response in similar form but with the
         message body containing a WML document.
    4. The WAP proxy server receives and encodes it into WML bytecodes. The result is
         then sent to the requesting mobile station.
    5. The mobile station parses the message and displays the information.



4.1.2    WAP Gateway

WAP utilizes WAP proxy server, or gateway to provide efficient wireless access to the
Internet. A proxy plays the role of both server and client. The main functions of the WAP
proxy including:
Protocol Gateway - translates request from the WAP protocol stack to the Internet protocol.
The gateway also performs DNS lookups to resolve domain names used in the request URLs.
Content Encoders and Decoders – perform the Wireless Markup Language (WML) text and
bytecode conversion to reduce the information transmitted over the bandwidth-limited mobile
network.
User Agent Profile Management – user agent profiles describing client capabilities and
personal preferences are composed and presented to the applications.


                                               16
Caching Proxy – maintains a cache of frequently accessed resources to improve performance
and network utilization.


This infrastructure ensures that mobile terminal users can access a variety of Internet content
and applications, and the application developers are able to build content services and
applications that are network and terminal independent. The WAP proxy allows content and
applications to be hosted on standard WWW servers and to be developed using proven
WWW technologies such as CGI scripting. [11]

4.1.3   WAP Protocols

WAP specification defines a set of lightweight protocols to ensure minimal bandwidth
requirements, and can operate over a variety of wireless bearer services. This is achieved
through a layered design of the protocol stack (Figure 5). This architectural design is derived
from the International Standards Organization (ISO) network model and comprises six layers.
Each layer provides a set of functions and/or services to other services and applications via a
set of well-defined interfaces.




                              Figure 4 The WAP Protocol Stack [9]



Wireless Datagram Protocol (WDP)
WDP defines the WAP transport layer. WDP can operate over different bearers to offer
consistent services to upper layer protocols of WAP. Therefore, the higher layers can function
independently of the underlying network. For IP-based wireless networks, the User Datagram
Protocol (UDP) is adopted as the WDP protocol definition.


Wireless Transport Layer Security (WTLS)
                                              17
WTLS defines the WAP security layer. WTLS provides a high level of privacy, data integrity,
and authentication for WAP services. It optimizes the TLS protocol used in Internet to
accommodate for limited bandwidth, processing power, and memory capacity in wireless
environment. The WTLS features can be enabled or disabled.


Wireless Transaction Protocol (WTP)
WTP defines the WAP transaction layer. WTP is similar to TCP/IP, but was designed to carry
as little overhead as possible, to optimize use of limited bandwidth. It supports three types of
transactions: unreliable one-way requests, reliable one-way requests and reliable two-way
request/response transactions.


Wireless Session Protocol (WSP)
WSP defines the WAP session layer. WSP supports content exchange for client and server
applications by establishing a session between client and server. The session can be
suspended to release network resources when it is idle, and the session may also be resumed
at a different bearer network by using a lightweight reestablishment protocol. WSP supports
both connection-oriented and connectionless services.


Wireless Application Environment (WAE)
WAE defines the WAP application layer. It provides an environment for mobile operators and
content providers to efficiently build applications on top of different wireless platform. WAE
is centered on the programming languages specific to WAP applications, including WML for
generating documents and WMLScript for adding more interactive scripting features. WAE
defines a set of content formats, a micro-browser, and a framework for wireless telephony
applications (WTA). WAE supports also User Agent Profile (UAProf) and push technologies.
With UAProf, a WAP handset can describe its capability to application servers so that the
server can generate contents based on the handset‟s capability. With push mechanism, the
application server can send information directly to the application environment for
processing.


The WAE is especially significant in the context of mobile entertainment services
development, as it comprises the four architectural components currently required to build
WAP applications, including WML, WMLScript, micro-browser, and WTA.


WML is a user interface independent markup language based on XML compacted for use
with narrowband devices. WML includes the following specific features: [12]

                                              18
       WML specifies text presentation and layout. It includes text and image support,
        including a variety of formatting and layout commands.
       WML supports the deck and card architecture. A card is a user interaction unit. Cards
        are grouped together into decks, and a deck is a transmission unit. This architecture
        allows the content optimized for small displays to be transmitted without repetition
        and redundancy over narrow bandwidth links.
       WML includes support for explicitly managing the navigation between cards and
        decks. WML also includes provisions for event handling in the device, which may be
        used for navigational purposes or to execute scripts.
       WML includes support for string parameterization and state management. through
        the use of variables and history. All WML decks can be parameterized using a state
        model. Variables can be used in the place of strings and are substituted at run-time.
        This parameterization allows for efficient use of network resources.
       WML supports the Unicode character set. This facilitates the adaptation of WAP data
        to a wide variety of languages, enhancing global usability.


WMLScript is a lightweight scripting language similar to JavaScript, which provides
programmable functionality that can be used in clients with limited capabilities over narrow-
band communication links. WML scripts are not embedded in the WML pages. WML pages
only contain references to script URLs. WMLScript is compiled into byte code on the server
before it is sent to the WAP browser. Scripting enhances the standard browsing and
presentation facilities of WML. WMLScript can be used to support more advanced UI
functions, add intelligence to the client, provide access to the device and its peripheral
functionality and reduces the amount of bandwidth needed to send data between the server
and the client. WAE defines the library interfaces for the standard set of libraries
(WMLStdLib) supported by WMLScript to provide access to the core functionality of a WAP
client. [13]


The micro-browser specification specifies the interpretive capabilities of mobile equipment in
much the same manner as a web browser. It is responsible for managing WAP requests, and
handling communication with the WAP protocol stack and proxy server. It also interprets
WML and WMLScript byte codes. This specification is also fault-intolerant, so meticulous
coding is necessary to minimize the errors.


The WTA framework supports Wireless Telephony Applications that interface with the in-
device telephony related functions and the network telephony infrastructure.

                                              19
WAP requires also an underlying bearer to carry data. The data can be sent over the most
appropriate bearer available and separate the protocol layer from the application layer,
facilitating application migration across adequate bearers. However, the capacity of WAP is
then depend on the bearer that carries it.


4.2   WAP 2.0

WAP 2.0 extends WAP‟s capabilities significantly. It provides support for the Internet
standards and protocols such as IP, TCP and HTTP. WAP 2.0 is based on XHTML, which is
easier for developers to program applications that function across different devices. WAP 2.0
optimizes usage of higher bandwidths and packet-based connections of wireless networks
such as GPRS and 3G cellular. WAP 2.0 provide rich application environment supporting
color graphics, animation, audio, location-based services, and data synchronization. WAP 2.0
also provides backwards compatibility to previous WAP versions.


4.3   JAVA 2 MICRO EDITION (J2ME)

The J2ME is the Java platform for consumer and a broad range of embedded devices
including mobile phones, PDAs, etc. The J2ME platform is a set of standard Java APIs
defined by expert groups that include leading device manufacturers, software vendors and
service providers. The J2ME platform provides a flexible user interface, robust security
model, broad range of built-in network protocols, and support for networked and
disconnected applications. With J2ME, applications are written once for a wide range of
devices, are downloaded dynamically, and leverage each device's native capabilities. [2]


The J2ME comprises a virtual machine and a minimal set of class libraries. They provide the
base functionality for a particular range of devices that share similar characteristics. There are
two J2ME configurations: the Connected Limited Device Configuration (CLDC), and the
Connected Device Configuration (CDC). The CLDC is designed for devices with intermittent
network connections, slow processors (16- or 32-bit CPU) and limited memory (128kb-
512kb), such as mobile phones and PDAs. The CDC is designed for devices with more
memory (2MB), faster processors (32-bit CPU), and greater network bandwidth, such as TV
set-top boxes, residential gateways, and high-end PDAs. The Mobile Information Device
Profile (MIDP) is a set of APIs that are designed for mobile phones and PDAs. It is
responsible for application management, user interface, local data storage, networking, and
timer functions, providing a complete runtime environment for J2ME applications. The

                                               20
optional packages are modular that provides standard APIs for using both existing and
emerging technologies such as Blue tooth, Web services, wireless messaging, multimedia,
and database connectivity. More information about J2ME platform is available at
http://java.sun.com/j2me.


4.4   WAP Applications

Current WAP applications include unified messaging and e-mail services. Information
services delivering news, weather reports, financial market information, and sports scores are
available. The introduction of push has improved the environment for m-commerce services.
Global Positioning System (GPS) functionality with 2.5G will facilitate location-based
services.


Entertainment services are expected to be a major application of WAP technology. Current
offerings are limited and distributed selectively. Enhanced services are likely to include
multimedia, MP3 and other data downloads.


4.5   Usability Analysis

The user interfaces for WAP devices remain tedious and difficult. The browsing capabilities
are limited. Although WML and WMLScript code is standardized, it is unavoidable that
different micro-browsers interpret applications differently. Testing WAP applications on
various handsets can reduce the problem, but cannot eliminate it unless applications are
optimized for all handsets and the server configured to recognize each one. Connection
failures sometimes occur in spite of apparent full network coverage, which restrict access to
services. Moreover, the delivery of effective, enjoyable entertainment services depend much
on WAP bearers. Combining various handsets with various gateways currently in use can
yield unpredictable performance. However, compare to SMS, richer content is possible with
WAP because WAP micro-browser can support 15 characters for titles and 750 characters for
page text. Presentation remains crude, but allows for better visual quality overall. And
transactions on WAP are faster than with SMS.


WAP 2.0 will facilitate improvements at service development and deployment. The J2ME
handsets will facilitate extended functionality and personalization. However, to achieve
optimal performance, J2ME applications require more sophisticated handsets and faster 3G
networks support. Optimized 2.5G networks and handsets represent better opportunity for



                                             21
mobile entertainment. However, 3G networks and compliant handsets represent the most
substantial opportunity.




                                        22
5     3G Technologies


Third-generation technologies will supplant current technologies and 3G systems are
expected to offer better system capability and higher data transmission speed to support
wireless Internet access and wireless multimedia services. The services include high-quality
voice, Internet, and multimedia services.


The following present briefly relevant 3G network standards, enabling technologies,
applications, and usability issues.


5.1    3G Network Standards

International Mobile Telecommunications 2000 (IMT-2000) is the ITU‟s proposed standard
for 3G networks. The two major standards, Wideband Code Division Multiple Access (W-
CDMA) and Code Division Multiple Access 2000 (CDMA2000), are briefly introduced in
order to provide a context for analysis of application development.


The WCDMA is the European Telecommunications Standards Institute‟s choice for 3G
cellular systems. One of the main advantages of WCDMA is that it can extend the existing
GSM core network, maximizing reuse of existing equipment. It can also overlay TDMA and
CDMA networks.


The implementation of WCDMA will be a technical challenge due to its complexity and
versatility. WCDMA requires implementation of Radio Network Subsystems (RNSs) that link
to the core network. RNSs control resources for a set of cells, performing functions including
radio resource allocation for telephony and data transfer, overseeing security and privacy, and
handover detection/execution. [3] It supports theoretical data rates up to 2Mbps, though only
supports 384kbps for wide area access. The much-enhanced data rates require a 5 MHz wide
carrier. The capacity of WCDMA is 50-80 voice channels per carrier. The Implementation
requires also compliant handsets. This standard is expected to account for approximately 70%
of 3G networks.


The CDMA2000 specification was developed by the Third Generation Partnership Project 2
(3GPP2), which consists of five telecommunications standards bodies including ARIB and
TCC in Japan, CWTS in China, TTA in Korea and TIA in North America. CDMA2000 has

                                              23
already been implemented to several networks as an evolutionary step from cdmaOne as it
provides backward compatibility with the IS-95 architecture. CDMA2000 can support mobile
data communications at speeds ranging from 144kbps to 2Mbps.


CDMA2000 1x EV-DO and CDMA2000 3x are ITU approved 3G standards. The 1x Radio
Transmission Technology (RTT) uses 1.25MHz of bandwidth to support data rates of
144kbps and up to 307kbps. 1xEV-DO supports max 383kbps to 2.4Mbps. 3xRTT will use
5MHz of bandwidth, support data rates up to 2Mbps. This standard is expected to account for
approximately 13% of 3G networks.


Numerous other 3G standards exist. However, a full discussion of the various standards and
technologies is beyond the scope of this report.


5.2   Enabling Technologies

Fundamental improvements in network implementations together with sophisticated
supporting technologies such as Mobile Station Application Execution Environment (MExE)
and Bluetooth will enable richer multimedia applications.


MExE is a specification managed by 3GPP that will standardize the environment for
executing mobile applications across the full range of 3G devices. It incorporates WAP and
Java in a framework specifying a significantly more flexible and secure application for 3G
handsets. [3] The MExE specification uses “Classmarks” to categorize mobile devices based
on their performance. By using the system, application can be classified to be compatible with
particular handsets. Classmark 1 relates to WAP. Classmark 2 supports Personal Java (which
incorporates the JVM) and the JavaPhone API. Classmark 3 supports JVM, which is part of
J2ME architecture. It supports also CLDC (Connected Limited Device Configuration) and
MIDP (Mobile Information Device Profile). Classmark 3 is particularly capable of supporting
gaming.


Bluetooth is a de facto standard enabling wireless connectivity between devices such as
mobile phones, mobile computers, and PDAs. It was conceived by Ericsson in 1994, and is
now developed by the Bluetooth Special Interest Group. Bluetooth provides low-cost, low
power, robust, secure, efficient, high capacity, ad hoc voice and data networking. Bluetooth
requires a low-cost transceiver chip be installed in each device. The transceiver utilizes the
unlicensed frequency band of 2.4 GHz that is available globally to transmit and receive data.


                                              24
The connections between devices can be point-to-point or multipoint in maximum range of 10
meters. Data can be exchanged at a rate of up to 1 Mbps.


5.3   Applications

3G applications will substantially increase wireless functionality and richness of content over
previous   generations.    These    applications   include    communications,     information,
entertainment, and m-commerce.


Entertainment applications are likely to achieve unprecedented usage. Gaming is a key
application with regard to entertainment and location-based services will create a realistic
gaming environment. Audio and video applications are also expected to be popular.
Multimedia Messaging Service (MMS) facilitates richer and more personalized content.
Unified messaging will provide a single interface for downloading communications from
various sources.


5.4   Usability Analysis

Compared with the 2G systems, 3G systems offer better system capacity, high-speed wireless
Internet access, and wireless multimedia services including audio, video, images and data.
The user will experience vastly improved interactivity and visual impact. 3G devices will be
improved with enhanced battery capabilities, larger screens and higher resolutions, more
sophisticated mini-browsers, more memory, and greater storage capacity. Entertainment
applications will become streamlined and viable across various wireless devices. To ensure
application integrity and client safety, security issues need to be addressed. However, 3G
entertainment services becoming popular require sufficient penetration of 3G networks and
compliant devices.




                                              25
6       Mobile Entertainment Market Analysis


This section presents analysis of a range of key factors driving the mobile entertainment
market. Firstly, analysis of revenue models explores various means of generating revenue
from mobile entertainment. Secondly, discussion of effective marketing strategies provides
vision of achieving success in the market.


6.1       Mobile Entertainment Business of Today

There are regional differences in the case of mobile entertainment. The Far east, specifically
Japan and Korea, is considered to be the leading region for uptake and acceptance of mobile
entertainment. Europe is second in acceptance with Scandinavia, the UK and Italy being the
most aggressive markets. The US, as far as the overall adoption of mobile services goes, trails
when it comes to adoption of mobile entertainment services. Market analyst reports are still
forecasting multi-billion dollar industries for mobile games, mobile music and other forms of
mobile entertainment. [7]


The most successful service to date is ring tones. Close behind the success of ring tones are
mobile games. The industry is expected to grow from 1.5 billion Euros in 2001 to 15.4 billion
Euros in 2005. [1] Although the vast revenues are generated by mobile entertainment,
insufficient amounts of these revenues flow through to the companies providing the content
and technology.


6.2       Revenue Models

6.2.1          Mobile Entertainment Value Chain

As illustrated in Figure5, the service chain for mobile entertainment industry typically looks
like this:


                                              Wireless
    Content       Application                Application                   Mobile       Mobile
    Provider                     Publisher     service            Portal   Operator     Device     Consumer
                  Developer                   Provider                                Manufactur
                                                                                      er
                                                                Provider

                                Figure 5 Mobile Entertainment Value Chain


                                                           26
Content Provider
Content providers create original contents or provide popular brands, characters or themes for
mobile entertainment applications. Disney and Sega are example companies.


Application Developer
Application developers are responsible for creating entertainment products. Codetoys is an
example.


Publishers/Aggregators
Publishers fund the development of applications and bundle the applications from developers.
Publishers ensure a strong wholesale market position. Example companies include Digital
Bridges and JAMDAT.


Wireless Application Service Provider
Wireless application service providers develop, implement or operate mobile entertainment
platforms. Example companies include Cash-U, OpenMobile.


Portal Provider
Portal Providers provide the network based customer interface and the content selections
through which a consumer can access mobile entertainment products. Companies include
wireless network operators such as Vodafone and Telefonica as well as independent portals
such as Yahoo! Mobile.


Mobile Operators
Mobile operators provide mobile connectivity and content delivery between content
repositories and consumer handsets. Vodafone, Telefonica, and NTT DoCoMo are examples.


Mobile Device Manufacturer
Mobile device manufacturers are responsible for design, manufacture and marketing of
mobile devices and their operating systems. Companies include such as Nokia, Motorola,
Ericsson and Siemens etc.


Consumers
Consumers use the services provided by above service providers.


There are also many variations of this chain. Many companies in this chain may occupy more
than one role.
                                             27
6.2.2      Revenue Sharing

A logical and typical model for mobile entertainment companies is based on revenue sharing
with mobile operators. Operators can easily take the advantage of existing customer
relationships to market entertainment services to both existing and potential subscribers. A
user plays a SMS game is usually engaged in at least 10 transactions, which can generate
significant revenue for both the operator and the entertainment application providers despite
low prices per transaction. Revenue sharing for WAP games is based on airtime with regard
to CSD and other payment options for packet based connections. However, the revenue for
each depends on the revenue split among the companies of the value chain. Difficulty
securing favorable agreements with operators is one of the most fundamental limitations for
mobile entertainment industry. Gartner analyst Ben Wood believes that revenue sharing is
untenable as a primary revenue stream, with splits yielding no more than 10% for the content
provider. [3] A favorable structure of NTT DoCoMo‟s i-mode relations with application
providers is worth mentioning. They take a 9% commission and pass the remaining revenue
along the service chain. The success of NTT DoCoMo‟s model and much higher
entertainment services usage of i-mode subscribers exemplify the value of mobile
entertainment. Therefore, it is important to establish favorable revenue sharing agreements
among companies along the service chain to ensure business success.

6.2.3      Licensing

Some mobile entertainment companies may establish revenue sharing agreements by
licensing their services. In this case, the payment structure changes radically to a series of
transactions that occur prior rather than after games deployment. Operators pay wholesalers
for licensing their deployment technologies and applications, wholesalers pay publishers for
distribution rights to copyrighted applications, and publishers buy the copyrights from
developers.

6.2.4      Retail

In this model, users subscribe to the entertainment services with certain fees. To maximize
volume, different payments schemes can be used to allow frequently accessed users to pay a
flat fee for unlimited use and pay per use for casual users. However, at present only operators
can employ this model, since they control billing for all end-user wireless services. Open
mobile Internet models and secure m-payment technologies may eventually create
opportunities for more direct and universal distribution channels involving independent
portals.



                                              28
6.3   User Groups

It is very important to identify and understand the users for developing effective content and
marketing strategies. Many mobile entertainment companies are focusing their marketing
efforts on teens. The full range of potential users deserves consideration in planning the
rollout of wireless entertainment services.


Teenagers
Teenagers have the greatest amount of free time and intense desire to acquire the latest
innovations. They are the group that with generally enthusiastic attitude toward new
technologies, especially when related to entertainment and communications. They are likely
to increase playtime in response to prizes and challenges. They usually do not concern much
on charges if their parents do not implement stringent boundaries concerning cost.


Young Adults
Many young adults, especially the college students, will probably use mobile entertainment
services frequently, as well as using telephony and information services. The value of
targeting this group is their propensity to consume and increase the visibility of novel and
interesting products as well as they are making brand decisions that may exert lasting
influence. This group shares an enthusiastic attitude toward entertainment and
communications technologies with teenagers.


Adults in late twenties and early thirties
This group has still many recreational interests as their younger counterparts. They will easily
adapt to mobile entertainment services as well as information and telephony services. The
significant consumption of mobile entertainment is expected when the quality of mobile
gaming improves for this group. Extensive time and cost investment will most likely occur
with regard to specific applications that satisfy their expectations. This group is probably only
enthusiastic about innovations that truly meet their entertainment needs.


Corporate over 35
This group of users may be more casual, more self-conscious and less adaptive than other
groups. This group will probably take the longest time to adapt to mobile entertainment
services but may generate significant revenue once the industry is well established.


The preceding analysis simply divided the users into different groups according to their age.
However individual personality are far more complex. There may be many other factors that
                                               29
influence the user behavior such as culture difference. Obviously, the content and marketing
require localization for different cultures. Anyhow, understanding the users will offer
excellent insight into the potential audience and target markets for mobile entertainment
industry.


6.4    Marketing Strategies

In order to successfully attract and retain the consumers requires effective marketing
strategies.


Co-branding Content Partnership
Establishing co-branding content partnerships with existing brands is the most effective way
to reach a broad user base. With co-branding, the mobile entertainment company enters
markets with the strength of wireless platform while launching in conjunction with TV shows,
movies, sports events, etc. The co-branding partners can utilize the strength of the company‟s
platform while localizing content and branding. Establishing such partnerships quickly will
allow strong brand identity development while the market is still in its infancy. [3]


Public Media
It is well known that media formats such as television, radio, and print provide significant
opportunity to market any products or services include mobile entertainment. Press releases,
advertisements, and wireless technology publications relevant to target market segments can
also broaden exposure to a wide user base.


Online Advertising
The primary consideration in determining advertising strategy is how to most effectively
reach the intended audience. Online advertising is now more interactive, visually engaging,
and personally relevant, this provides much greater flexibility in content presentation. There
are numerous online advertising techniques. Employing rich media techniques to implement
interactivity will improve the overall effectiveness of online advertising. The mobile
entertainment has a unique advantage in terms of advertising online branding due to its
inherent interactivity. Online demos can help gaining the most relevant possible exposure to
the overall Web audience.


Promotions
Promotions are also important and effective strategies for mobile entertainment companies or
operators increasing sales and customer loyalty on the basis of incentive. Incentives are an
                                               30
important factor of attracting consumers‟ stickiness. Consumers may be offered free logo,
ring tone, and games etc. This is also an effective way of online branding. Contests and prizes
are promotional methods of particular significance. Competition itself can somehow entertain
participants and prizes are the most appropriate complement. Actually, most popular online
games sites provide consumer top scores and overall rankings for each game, and the one
positioned on the top of the ranking would be offered prizes. The prizes include awarding
“points” to additional game play, merchandise at popular stores or certain e-commerce sites,
gifts, holidays, and cash. For example, Vodafone UK awards a cheque for £3000 to top scorer
entered the Hall of Fame who playing the popular mobile game “who wants to be a
millionaire”. This provides a clever incentive for attracting and retaining users.


Registration and Subscription
Registration and subscription services facilitate user data collection and analysis, which in
turn can be utilized for user-based marketing strategies and service improvement. User and
applications databases can yield important demographic and play pattern data. Knowing who
is using which services and for what average length of time is extremely useful in evolving
marketing strategies and contents design innovations. This would create potential opportunity
of increasing profitability. However, securing customers privacy and without exposure to
public is important.


Marketing is a crucial aspect of success in a mobile entertainment venture. A successful
strategy will utilize many of the above approaches. Establishing co-branding and partnerships
is essential for maximizing exposure. This will reduce marketing and advertising costs while
providing association with a known brand. Prizes are an important and effective strategy of
successful mobile entertainment service.




                                               31
7   Conclusions


The mobile entertainment industry, while still in its formative stages, shows signs of
incredible potential. As the industry is young, complex and dynamic, there are dozens of
factors that will influence the way that the industry develops. Some factors are interrelated,
and there are some remain unknown yet.


This report outlines and analyzes the relevant issues and strategies for maximizing consumer
demand and revenue from mobile entertainment. Developing solid revenue streams and
highly competitive products is critical to realize the market‟s full potential. This is a
particularly complex market due to inherent technical restrictions, fragmentation of the value
chain between content creators and service providers, and the need for effective marketing to
stimulate consumer demand.


Wireless technologies evolution is enabling increasingly diverse data communications and
services possibilities. However, the pace of technological change and relatively deployment
environments fundamentally limit the quality and potential revenue for value-added wireless
services. It is therefore necessary to optimize the services to meet customer needs according
to commercial value and technology evolution. The complexity of relationships between
entities in the value chain also needs to be addressed to ensure maximizing profitability from
mobile entertainment for each role.




                                             32
8      References


[1] Booz, Allen, Hamilton, Future Mobile Entertainment Scenarios, March 2003, Mobile
Entertainment Analyst
http://www.mobileentertainmentforum.org/articles/MEFWP_Future_ME_Scenarios.pdf
[2] Java™ 2 Platform, Micro Edition
http://java.sun.com/j2me/j2me-ds.pdf
[3] Jennifer James, Mobile Gaming, August 2001
[4] Simon Buckingham, SMS Tech, July 2001
[5] Simon Buckingham, SMS Tech
[6] Simon Buckingham, SMS Express, July 2001
[7] Stephen N Wiener, The State of Mobile Entertainment,
http://www.mobileentertainmentforum.org/articles/The_state_of_mobile.doc
[8]          Today‟s             GSM            platform,           GSM            Association,
http://www.gsmworldcom/technology/gsm.shtml
[9]    WAP     Forum,   Wireless   Application      Protocol   White      paper,   June   2000,
http://www.wapforum.org/what/WAP_white_pages.pdf
[10] WAP Forum, http://www.wapforum.org/who/index.htm
[11] WAP Forum, WAP Architecture,
http://www1.wapforum.org/tech/documents/WAP-210-WAPArch-20010712-a.pdf, July 12,
2001
[12] WAP Forum, Wireless Application Protocol Wireless Markup Language Specification
Version 1.3, February 19, 2000
http://www1.wapforum.org/tech/documents/WAP-191-WML-20000219-a.pdf
[13]     WAP      Forum,    WML        Script      Specification,    Version       25-Oct-2000,
http://www1.wapforum.org/tech/documents/WAP-193-WMLScript-20001025-a.pdf




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