ARCchart: Tornado To Strike Cellular Operators

Taiwan OEM/ODM HTC has helped propel the smartphone market forward with its innovative designs and products, such as the Treo 650 and the Audiovox SMT-5600 just to name a few. ARCchart takes a look at one of its upcoming products, dubbed the HTC Tornado, and the potential impact it will have on wireless carriers.

As the article states, the Tornado is one of the first Wi-Fi enabled devices in a truly handset form factor that will run Window Mobile Smartphone.It also plays music :-) ARCchart discusses the potential threat such a device presents to the carriers, and believes bypassing the data network is minor since only "a fraction of their total revenue [is] from data services."

ARCchart states "the threat comes from VoIP" and cites the Cicero Softphone solution as an example of a possible third-party add-on to the Tornado, "which replaces the handset’s native dialer and can intelligently route calls over Wi-Fi or cellular, depending on which networks are available." As ARCchart notes:

Whether or not operators decide to offer the HTC Tornado to their customers will reveal how vulnerable they feel in this converging world. Orange, for example, has to date branded and offered virtually all of HTC devices under it SPV series of signature phones. Will it now also offer the Tornado? T-Mobile has shown an equal fondness of HTC’s handset, and distributes them under the MDA model series. In the last few days, T-Mobile USA has said it will be offering the Tornado (the handset recently received FCC approval). The fact that T-Mobile USA is the largest hotspot operator in the US is almost certainly the main reason behind this decision. The operator, now the smallest and most vulnerable of all the national providers, will be in the position to offer highly differentiated packages to its customers by exploiting its mix of Wi-Fi and cellular coverage.

Personally, I would love to have a Wi-Fi enabled handset even if I was still getting the same bucket of minutes and the all-you-can-eat data plan from my carrier. Why? For me the convenience of having almost universal access to data is important. However, I'm not sure whether a T-Mobile model of Wi-Fi hotspots and cellular coverage will be successful since most mobile phone usage is either at home or at work.

As Techdirt noted last week, a ComputerWeekly article reported that business users aren't that pumped up about using Wi-Fi. According to a survey by Gartner of 2,000 U.K. and U.S. business travelers, only 17 percent in the U.K. and 25 percent in the U.S. used Wi-Fi hotspots.

Gartner analyst Delia MacMillan said, “While Wi-Fi has come a long way, our survey shows that many business travellers remain uncertain as to why they should use Wi-Fi, what equipment they need, how they can connect and what they will be charged. If Wi-Fi providers really want to attract new customers, they must convince both end users and organisations of its benefits.”

So to the carriers I say be brave and offer a Wi-Fi enabled phone. Just don't expect to generate extra revenue via Wi-Fi hotspots...