Calling All Carriers: Mobile Software Startups Question Relevance of CTIA Wireless Expo

3/23/10Follow @gthuang

The mobile technology extravaganza known as the International CTIA Wireless Conference starts today in Las Vegas. Many thousands will attend. Keynotes will be given by such luminaries as Dan Hesse, the CEO of Sprint Nextel; John Stanton of Western Wireless and McCaw Cellular fame (also former CEO of T-Mobile USA); Randall Stephenson, the CEO of AT&T; and William Morrow, the CEO of Clearwire. Hollywood director James Cameron will join Biz Stone, the co-founder of Twitter, and Aneesh Chopra, the chief technology officer of the U.S. government, for a keynote panel discussion.

It’s clearly a Big Deal. CTIA (formerly the Cellular Telecommunications Industry Association) is the main trade association for wireless operators. Its semi-annual meetings are where mobile software companies and wireless carriers gather to show off their latest wares. They are where key customer relationships get built, where deals get worked on, and where mobile startups and developers have needed to show up to have a chance at cracking a most difficult marketplace.

But not anymore. Around Seattle at least—the birthplace of McCaw Cellular, the first nationwide cellular network, and a longtime hive of wireless and mobile activity—I’m hearing that CTIA is no longer the see-and-be-seen place for mobile software startups and developers. In fact, many mobile software insiders are skipping the event this year. It’s a trend that undoubtedly stretches beyond the Northwest, and it can be traced largely to the rise of Apple’s iPhone app store and open platforms like Google Android.

If you’re a small startup, getting carriers to sell your software historically has been very difficult—and now it might be unnecessary, depending on your particular market. “There is no question that CTIA is far less relevant to mobile software and application startups than was the case even two or three years ago,” says Bill Bryant, a venture partner with Draper Fisher Jurvetson and the co-founder of Qpass, Medio Systems, and a number of other tech companies. “For the first time, developers have true options to reach the mass market without ‘getting on deck.’” (That is, they can reach consumers more directly without having to be approved by carriers.) With less need for mobile-app developers to work with carriers, Bryant says, “CTIA is like COMDEX was: once important for distribution but now largely irrelevant. There are still some good parties, though.”

An anecdotal survey of mobile startups and developers finds several who used to go to CTIA but are not attending this year. Take Zumobi. The mobile applications company, based in Seattle, changed its focus in the past couple of years from a widget-based cellphone platform to smartphone apps for things like social networking, communication, and weather reports. The company has formed partnerships with major brands like The Today Show, TLC, MSNBC, Sporting News, and REI, and has focused on mobile platforms like the iPhone and Palm.

Instead of selling its software through wireless operators, Zumobi now depends more on advertising for its revenue. “I never would have thought that two years ago. I thought their path to market was through the carriers,” says Tom Huseby, a noted venture capitalist, mobile guru, and chairman of Zumobi’s board of directors. Now, he says, it’s more important for the company to understand what mobile advertisers and ad agencies want, and what brands want to do.

Still, there are notable up-and-comers from the Seattle scene that are attending CTIA. Swype, which makes a novel touchscreen interface for inputting text, works mainly with handset manufacturers, but needs good relationships with wireless carriers too. Ground Truth depends in part on carriers for its mobile-use metrics. And Medio Systems runs search for several carriers’ storefronts, but has shifted towards mobile advertising and analytics.

Increasingly, it seems startups are finding other paths to market that bypass the carriers. “For me, CTIA is a waste,” says David Bluhm, co-founder and CEO of Z2Live, a Seattle startup focused on software for multiplayer mobile gaming, starting with the iPhone. “I went last year (as always) and was amazed at the carriers’ denial and complete disregard for what the iPhone had done to that point.”

So perhaps Bluhm speaks for other mobile software startups in spirit when he says, “With dozens of meeting requests and party invitations in my inbox…I am happily making progress in Seattle without talking to any carriers.”

CTIA is well aware of the broader problem, of course. The conference organizers have made it a theme to appeal to more developers this week, through special tracks on mobile apps, networking events, and pitch sessions. But it seems clear that some parts of the industry have outgrown the CTIA meetings. Mobile developers have migrated to other expos like CES (Consumer Electronics Show), the Mobile World Congress, and the Apple Worldwide Developers Conference, as well as regional events like the Mass Mobile Month recently organized by mobile leaders in Massachusetts. All of this speaks to the fact that mobile developers can appeal directly to consumers now, and can sidestep the carriers to some extent. What broader effect this will have on mobile innovation remains to be seen.

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com. Follow @gthuang

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