Does Anyone Check These Numbers Against Reality?
By Mike Masnick, Fri Jan 21 02:45:00 GMT 2005

Research firms come out with reports every day predicting millions or billions of this or that. Sometimes you have to wonder if anyone actually does a spot check against reality.

During the bubble years, it was fairly common for various "market research" firms to come out with five year predictions on various markets. These weren't so much predictions, but extrapolations. Taking one or two years of data, applying some logarithmic growth curve and assuming that everything would look wonderful five years from now. Not many people actually believed these reports, but they were occasionally useful for startups trying to convince potential investors just how large their markets might be one day.

However, with research reports that are coming out predicting the size of markets in the near future, it would seem like it would be easier to mentally check these numbers with reality -- but it's unclear that's happening. Earlier this week, it appeared that two entirely conflicting research reports were released. The first, from Deloitte & Touche said that the global phone market would reach 2 billion subscribers by the end of this year -- not an entirely outrageous suggestion. It's certainly in line with what most others have been saying. However, the same day, IMS Research made an announcement that the global market would reach 650 million subscribers this year -- a number well below what most people already believed we're at. Could there really be a discrepancy so large between predictions on subscribers? Reading through the details, it seems pretty clear that this was a case where whoever wrote the press release got confused between "subscribers" and "new handset shipments." In fact, while the firm's website originally had the "subscribers" claim, it's since been updated to say shipments. Still, those who ran the original story apparently never bothered to check if the numbers made any sense at all.

In some cases, this leads to misleading numbers piled upon misleading numbers. Last month, a firm called Juniper Research claimed that the market for MMS messages would reach $42.5 billion this year, doubling 2004 -- suggesting that 2004's MMS revenue was around $21 billion. That's quite a lot of money -- and if it had actually happened, that operators wouldn't be so shy about publishing actual numbers. It's also likely that there wouldn't be all these stories pointing out that no one is actually using MMS. Still, that hasn't stopped another firm from taking these questionable numbers and coming up with its own predictions based off of the $42.5 billion. In this case, it's a company trying to sell solutions to make sure MMS messages get where they're sent. It claims that a lot of these messages don't make it, and based on that $42.5 billion number, operators stand to lose $6 billion. Of course, that assumes that MMS senders pay on successful delivery of a message, when many systems charge the user as soon as the message is sent, whether or not it's actually delivered.

Either way, for companies looking to build up a presence in the mobile space, it's useful to have accurate numbers of what's going on, for the sake of planning out their own strategies. Conflicting and misleading research only creates more problems in the industry by obscuring what the really important issues are for future growth.