Mobile web will split in two

Technology gap with developing world will lead to extra complexity for business

Devices like the iPhone will not become prevalent in the developing world for some time

Businesses may be forced to deal with two separate tiers of mobile internet, as the technology gap between developing and developed countries grows.

In many parts of the world, mobile phones are providing people with their primary means of accessing the internet, side-stepping the prohibitive cost of computers and supporting infrastructure. These users represent an untapped but potentially large source of revenue.

But while devices such as Apple’s iPhone are now finally offering an internet experience that parallels the desktop world, the networks and phones of developing countries are set at a much lower level. This discrepancy is due to continue for some time, said Ann Mei Chang, engineering site director at Google.

“I think there will be a two-tier system for a long time,” said Chang. “Say, 50 years from now, we will be at a higher level which the iPhone has set. We expect there to be multiple tiers, and we are trying to address that with different products.”

While it will not ignore low-end users, the search giant is focused on delivering high-speed search tools and other web-based applications to the upper end of the market.

A company of Google’s size can afford to cater to multiple tiers, but many businesses will be forced to choose, said KF Lai, chief executive of Singapore-based
mobile communities company BuzzCity.

“It will be very difficult for one company to handle both tiers, because the skills required are quite different,” he said. “Most will instinctively go for tier one, because the users have higher earning powers.”

BuzzCity’s social network, myGamma, targets developing markets such as Kenya, Nigeria and South Africa, generating revenue through product advertising.

“Even in a relatively developed country such as Thailand, outside of Bangkok there are users who can only be reached by TV. Mobile phones provide an interactive way to reach these users,” said Lai.

There are specific hurdles with working in developing markets ­ one being a lack of online payment systems. Many of myGamma’s users do not have credit cards or even bank accounts, but advertisers aim to deduct phone credit from a customer’s pre-pay account instead.

For many suppliers, the deep pockets of users in the developed world will remain the most appealing targets.

But Ian Chard, analyst at Juniper Research, said it would be wise to at least consider developing countries.

“If you reach hundreds and thousands of subscribers, each spending 10 cents, you could be looking at a large spend,” he said.