“White-box” mobile phones drive advertising boom for BuzzCity

BuzzCity is a mobile content, media and advertising company that we love to follow here on GoMo. The company targets lower-end devices around the world, and has been having huge success feeding advanced content to non-smartphones. May 2011 was it’s most successful month ever in terms of mobile advertising – serving 10.5 billion ads. And the company claims that white-box devices are one of the biggest drivers.

What’s a white-box device?

Originally, a “white box” meant a computer that you built yourself at home from separately bought components. It meant you could get a really good machine for much cheaper; if you had the know how. The term “white box” borrowed from the term “white label” and refers to the fact that your computer was unbranded – no Dell or HP logo graced it.

When it comes to mobile devices, white box means something a little different. Rather than being unbranded, they are instead from small and medium sized manufacturers in markets like India and China. They mass produce feature phones that copy as many of the functions of smartphones as they can, and sell them for much cheaper. These manufacturers are highly successful, to the point where larger manufacturers have seen their sales being hurt by them.

Now, once these devices have been created, the manufacturers need to get decent services on them to attract consumers. And this is where BuzzCity comes in. It runs white-label mobile services – like gaming service Djuzz, cooking network Now-Cook and gig-advertising service JAMsked – and sells advertising on the BuzzCity network. It claims that the emergence of white box devices as a serious competitive force has meant that there are now more and more people who can afford devices that run good mobile Internet services. And BuzzCity is there to provide them. Along with the 10.5 billion ads served in May, it claims that 45 million games have been downloaded from Djuzz since January, and it is on track to hit 100 million downloads by June, while JAMsked promotes 40,000 gigs per day.

Dr KF Lai, BuzzCity CEO says that “white-label services like ours make sense, as many mobile strategies rely on quality and relevant content as an important element. Mobile hotspots continue growing throughout the world as the adoption of 3G is coupled with cheaper data rates. However alongside that we are seeing the continued rise of affordable white-box phones which will provide access to the internet where there are no 3G networks and to a wider audience who cannot afford the prices of the smartphones.  All in all this results in a greater demand for content that we are experiencing.”

What we think?

For me, the line between what is and is not a smartphone becomes more blurry every day. iPhone and Android devices have shown the world what mobiles are capable of; what kinds of services and products a mobile can provide. But in some of the biggest markets in the world, Androids and iPhones simply aren’t affordable. But the services often don’t really need a high-end smartphone to run on. They can be replicated on much lower tech phones. And so there is a vast gap in the market which white-box manufacturers have been rushing to fill with far greater speed than the larger manufacturers.