ABI Research Sees Mobile Platform as Fertile Ground for Proprietary DRM Vendors.

OYSTER BAY, N.Y. -- Please replace the release dated April 10, 2006 with the following corrected version due to multiple revisions.

The corrected release reads:

ABI RESEARCH SEES MOBILE PLATFORM AS FERTILE GROUND FOR PROPRIETARY DRM VENDORS

Multimedia to the mobile phone is one of the hottest and youngest market segments in the wireless arena. Attempts to bring uniformity to it with open digital rights management standards are premature at this stage, according to a new study released by ABI Research.

The Open Mobile Alliance (OMA), an industry group counting mobile operators, IT companies, wireless vendors and content providers as members, developed an open DRM specification for multimedia content distribution to mobile platforms. Separate from OMA, MPEG LA is the organization that administers licensing for certain DRM-related intellectual property used in the specification.

The high prices set by MPEG LA precipitated lengthy negotiations with operators. The resulting delay created an opportunity for proprietary DRM vendors. Mobile operators such as Sprint, Verizon, Telus Mobility and the Vodafone subsidiary SFR have all deployed services using proprietary DRM solutions. Verizon uses Microsoft DRM for its V CAST; Sprint uses Groove Mobile's proprietary solution; Vodafone, while flirting with the OMA specification, has also used DRM from Secure Digital Container (SDC).

"This is a classic example of what not to do when trying to nurture a new market," says Vamsi Sistla, ABI Research's Director, Broadband and Multimedia Research. "It is misguided to pursue an open standard solution in a brand-new market. A better time is after a few years, when the market is disjointed, the competition has changed, and companies can collaborate to benefit from economies of scale. Right now, operators are focusing on their ability to monetize this trend and get their solutions to the market sooner than their competitors."

"Any emerging technology should find its way into the market by the trial and error of multiple solutions," says Sistla. "Early in a market's development, companies whose proprietary solutions don't rely on external integration are often more successful than those that must agree with other players in the sector." Apple's iPod/iTunes with its tight, exclusive vertical integration and 80% market share is a good example.

The study concludes that when more operators have entered the market and the services start to become commoditized, the time will be ripe for the benefits that open DRM standards may bring.

"Mobile DRM Market Analysis and Forecasts" explores the steps the content industry, mobile operators and DRM vendors are taking to build this marketplace, and discusses challenges for the convergence of content services and their likely impact over the next five years.

Founded in 1990 and headquartered in New York, ABI Research maintains global operations supporting annual research programs, intelligence services and market reports in automotive, wireless, semiconductors, broadband, and energy. For information visit www.abiresearch.com, or call +1.516.624.2500.