I’ve been in the European mobile entertainment business for about five years now. I saw it growth from nothing to a multi-billion dollar market.

I’ve experienced the birth of the first data technologies on GSM networks for downloading application to mobile phones and at this time the financial potential expected was huge. But finally it became very difficult to make money out of it.

Five years later, the market is still dominated by telecom giants and despite that phones are the most widely used devices, they’re also the most poorly designed. Beside the apparent innovation, phones are still used for the most common tasks; voice communication and text messages. All the rest has a ridiculous market share.

Here are 5 top reason why mobile business is so frustrating and why value added data services haven’t taken off yet and maybe won’t.

1 Carriers Rules

Carriers own the network and the subscribers. They simply rule the business and dictates the market. The problem is that no one can launch a service without the carrier approval and since they think only in terms of bandwidth usage, they will only select a service if it can leverage the consumption from users.

Subscribers and service providers all want unlimited access for voice and data for a monthly fee. But carriers are so afraid of loosing their business and be turned into simple ADSL providers that they’re really not working in that way.

Freely accessing the Internet will be the only way to develop new kind of mobile services without frightening users with uncontrolled pricing.

2 No Product Vision

Contrary to other mobile devices — consoles or PDAs — most mobile phones don’t have any design goal except communication. Any kind of component is assembled into the phone with no real purpose in mind.

That leads to multi-purpose devices that are poorly designed and totally incoherent. You often have a strange feeling when you use a mobile phone, you don’t exactly knows what you can do with it, it’s all very complex and expensive but you’ve been told that you need all the features.

3 Poor Hardware Integration

Phone manufacturers are slowly discovering a new world; the multimedia computing. The problem is that most of these guys are not coming from the entertainment industry like Nintendo, Sony or Microsoft; and you can really feel it. When you compare a high-end phone with a Nintendo DS for example, even if the phone is more powerful on paper you can really tell what’s the difference.

Phones are absolutely not designed for multimedia performances and 3D chip makers like nVidia are also discovering it the hard way.

In my company we worked on a nVidia GoForce 3D chip prototype. The performance of the board they gave us was really impressive — between a Dreamcast and a PlayStation 2.

Sadly, they told us that as soon as they put the chip into a real phone, the performances were just catastrophic. Actually, buses, memory and software layers were too slow to feed the chip.

4 Poor UI Design

Broadly speaking, hardware engineers don’t have any sense of UI and phones are no exception. In the time of black & white phone that was easy. But now with all that stuff inside, the user experience is a key point.

Not a single phone have a coherent user interface and configuring the phone is just a pain — nobody can seriously understand it. It’s like UI made by developers, you know the one with ugly colors, crappy icons and a sense of strange logic.

5 Java

Java J2ME is the mobile technology of choice in Europe. Java is interesting for manufacturers just because it runs in a sandbox and doesn’t require too much integration efforts. But actually, bad VM implementations make life harder for developers and can’t guarantee that an application runs everywhere.

Java also means JSR, the extensions to the original specification. There are tons of JSR out there for virtually everything. But manufacturers are not in a position to choose which one to implement. As a result, you cannot be sure to find a phone with the JSR you need for your application.

Java also lacks the interface to core services of handsets — even if JSR partially exists. It’s very difficult for the developers to trigger a phone call, browse the address book, record and play a sound, use the camera… and I’m not talking about the ridiculous intrusive “security” limitations.

Game developers are the guys that can make use of everything that makes a phone to build a unique gaming experience. But with the current state of Java, it’s very difficult to do it. Developers are limited to use the single common features.

A New Hope: Alternative Manufacturers on Alternative Networks

While manufacturers and carriers are fighting for the control a new hope for users and developers might rise from other actors.

Apple is in a very good position to propose an handset and there are lot of rumors. If you think about it, it’s obvious and a natural strategic move. It’s more easy for them to add a communication module on an iPod than a manufacturer’s handset to become the next iPod. If somebody can really make the best phone UI, they are the one.

Alternative networks are also expected soon. With the WiMAX coming in the next few years, the Internet will really become mobile. And as soon as you have access to an IP network, all the classic Internet service willl come with it; audio, video, chatting, browsing, gaming.

Free, a French ADSL provider has announced that in 3 years they will be able to cover the whole France territory with WiMAX, available for its subscribers for a monthly fee. And I’m quite sure that manufacturer are ready to integrate WiMAX chips into their phones. After all it’s also of their interest to bypass the carriers.

Next generation of mobile service will come from developers and 3rd party providers not from carriers. The mobile business will change drastically as soon as the Internet will be freely accessible and we’ll see at last what motivated and innovative people can do on an emerging business.

DISCLAIMER: this article article reflects my sole opinion and not the one of my employer.