Neil Wiles

Neil Wiles moved from a job in the music industry to the top role at Mobileactive in 2003. Since then, he has transformed the company from selling just polyphonic ringtones into a full-blown mobile services company.

Mobileactive also provides advertising services, and its Ring Ring Studios division is at work developing new apps for the iPhone and Android operating system. The company had revenue of $13.3 million during 2008-09.

Today, Wiles talks about the evolution of the mobile industry and the company’s current challenges.

What niche did you see when you first joined the business?

It was early in 2003 when I got started with the mobile business. At that time, with ring tones, there was a big buzz on that kind of content and you could just see the multimedia handset was very much in its infancy. The real thing for me back then was looking at this and thinking this was going to be very big – how much the phone was becoming an extension of self. Even back then people were moving from wallet and keys to wallet, keys and their phone. It was a statement of identity.

So then the big thing was thinking, when this achieves what people are forecasting, how do we compete at that point? So we’re dealing with digital content, and I saw how important it was going to be that we could be responsive, and have a deep knowledge of what content we were marketing, and what customers were doing with that content.

Obviously that meant building a better understanding of what digital content satisfies the emotional drivers of mobile phone consumers, and the kind of entertainment they’re looking for.

Your initial thought that the mobile would become a personalisation tool was correct, as we see with the rise of smartphones. Now with the rise of phones that are able to do so much more, how has that helped your business?

The business today is very different from where it started. When we started in mobile, people had a view that we were in ringtones, but that is a very small part of things now.

But with smartphones, we’re obviously very active in the apps space now, our content offering is very diverse and goes beyond just pure personalisation of the phone. We have a whole range of different services.

And also, consumers are much more aware, not only with mobile content but the whole process of consuming through the handset. They are looking for more variety for what’s on offer.

Speaking of applications, we’ve seen the rise of the Apps Store, now Nokia has their own Apps Market Place and Windows is bringing out their own as well. Have these application marketplaces hurt you?

No, they haven’t hurt us. Ring Ring Studios, our mobile content development and production division, has been doing iPhone bits and pieces, and we’ve got these things going out for Android, and the major focus is Java. So do we see these stores as a threat to our retail division? Not at all, they’re just another outlet, just another shopping centre, to use a retail analogy.

But then it all comes down to, using another shopping analogy, the question of “how’s your foot traffic?” With iTunes, for instance, when you first release your app you might be at the front of the shopping centre, but after a week, who knows where you are. And you can’t necessarily or easily get your application profiled, so it can be great in some ways, these stores, and difficult in others, especially with the huge volume of apps being developed.

So these marketplaces are all important to us, and they have value and a place, but our main focus is the majority of handsets that are still running on Java. Our retail business has 600 channels in 96 countries, and the majority of the business is coming from distribution partners who do their own marketing. So they’re a great outlet, but not a threat, and they’re not where we see the bulk of the opportunity at the present time.

According to your latest report, you’ve had 27% profit growth, and revenue was up 11%, but I’ve noticed your share price has largely stayed the same for the last 12 months. Why is this, and what are you doing to improve that price?

That’s a great question, but I have to be careful in what I say in terms of competitors. For our mobile retail division, there are other businesses that have been running at a loss and yet have a market capitalisation higher than ours, and that’s pretty frustrating. It can relate to a whole number of things, and effectively I think part of the issue we’ve had is that the financial crisis hasn’t helped a number of companies.

But another part of the issue is that people still think Mobileactive just sells ringtones, and then dismiss that by saying “that’s not a big growth area anymore, is it?” And I think we’ve got a job to do in educating the market as to what we’ve built and developed. We’ve had really good results, but we’re looking at this same question ourselves. To some extent we’re just concentrating on making people understand exactly what it is we’ve got going on, and the potential we have.

Does that mean you’re going on a bit of a branding exercise now?

I wouldn’t say it was branding, but more PR in terms of promoting all of the things the company is doing. After we split the business last November into the three divisions, really we’ve just been focused on getting that running and we’re now able to come out and say that yes, all divisions are contributing to revenue. We wanted to get results first, and now we have them.

But I think now we’re working on the process of just making it very clear we have three divisions active in all areas of the market where there is going to be significant growth for some time to come.