Wednesday, November 30, 2005

Down to wire for Motorola's new phones

The Chicago Tribune writes that while the competition is trying to steal away market share from Motorola's Razr this holiday season, "a few highly anticipated Motorola phones--all high-end, fashionable models--have been no-shows" so far. Mike Walkley at Piper Jaffray said, "You have several phones that are late. We expected them to be out by now."

Motorola has experienced painful delays in the past, but the Razr is still riding high and it is expected to be launched by Verizon in the next week or so. Roger Entner at Ovum said if this happens, "Santa will be nice to Motorola."

The long-awaited Moto models that are still MIA in the U.S. are the Slvr and Pebl. John Jackson at Yankee Group mentioned every extra day is lost revenue, and said "Time is getting tight." The Pebl is expected to launched by T-Mobile in mid-December.

According to Entner and Albert Lin at American Technology Research, the Pebl has been delayed due to technical problems. Reportedly the handset's "hinge opens so quickly, the momentum can thrust it out of a user's hands." Motorola is also rumored to be having trouble with certain chips.

Very important to Motorola's Q4 fortunes is the launch of the Razr for Verizon. Walkley remarked, "There is a huge pent-up demand." Holding up the phone is supposedly signal glitches.

Entner noted the Razr is also a big winner for network operators and estimated "the Razr makes up at least 10 percent of Cingular's phone sales. High-end phones usually comprise only about 1 percent of sales."

Commenting on the entry of Razr wannabes, Lin noted "It will be a tough fight for Samsung and other Razr competitors. He said the Razr "has become the iPod of cell phones."

Nokia Makes Enterprise Play with 9300i Smartphone

NewsFactor Network writes that Nokia is updating its brick-sized smartphone, the 9300i, with Wi-Fi connectivity to make it more attractive for enterprise users.

Yankee Group analyst John Jackson said Wi-fi is "a technology that will become standard in enterprise-class products, because it lets I.T. managers and business users take advantage of the massive installed base of Wi-Fi in corporate settings."

IDC's Dave Linsalata agreed and pointed out that "wireless LANs are considerably more efficient than carriers' wireless data systems in transferring large files, such as PowerPoint presentations."

According to Yankee Group, smartphone sales are predicted "to hit 52 million units this year, doubling the 25 million shipped in 2004," and "will rise to 85 million in 2006."

Enderle: RIM on the Ropes

Rob Enderle analyzes the potential impact of US District Judge James R. Spencer's denial of RIM’s motion to enforce an earlier settlement with NTP at Technology Pundits. As Enderle notes, NTP pulled out of that settlement, which was valued at $450 million,because "NTP is aggressively seeking the maximum benefit from their wining position and, apparently they now want a lot more than $450M."

Enderle's situation analysis is that "NTP appears to have the power to say whether RIM stays in business or not and that has given NTP a rather impressive negotiating position." One scenario Enderle puts forth is NTP taking an equity stake in RIM that probably would come with voting rights and "perhaps a controlling power."

Enderle also notes the increase market competition RIM faces, such as Palm/Microsoft, and states "RIM knows they have to have their shop in order before that happens [launch of Treo 700W] otherwise the two firms are likely to cut through their market share like a hot knife through butter."

Enderle concludes

It would be wise for both companies to find an agreement they both can live with so that the fight doesn’t destroy what otherwise could still be a lucrative future for both NTP and RIM.

Jupiter: 3 buys 7: when telcos acquire TV firms

Thomas Husson at JupiterResearch blogs about 3 Italia's acquisition of Canale 7, a private TV station for somewhere in the region of 30 and 35 M euros. Husson writes 3 will "invest over 200M euros in the development of new services," amd "also announced its IPO to be postponed to 2006."

Husson claims the main reason for the deal is "Channel 7 holds a network license for national digital TV distribution on terrestrial frequencies. The transaction will thus enable 3 Italia to implement a DVB-H network for its clients and to develop a Pay-TV and interactive services offer for videophones with the combined UMTS/DVB-H technology."

Husson also points out the xenophobic comments from Telecom Italia's CEO, who said "There are reasons to be worried when a Chinese operator starts buying frequencies in our domestic market being ready to lose billions without any business model."

Seems a bit over the top to me. Is Hutchison, which owns 3, a Chinese operator or a company run by Chinese? There is a difference ya know. Given Hutchison's capitalistic roots in Hong Kong and their ability to take on incumbent government monopolies, I think Telecom Italia should be worrying about more than where 3's parent is from....

Disney Enables ESPN Fans to Dial In

The Los Angeles Times pens another article on the launch of the Mobile ESPN MVNO by the folks at Disney. John Strand at Strand Consulting said, "Disney is looking for a way to grow its top line. And mobile phones are a huge market."

Regarding the hefty pricing, Marina Amoroso at Yankee Group, said "Less than 1% of the market will pay more than $199 for a phone. They are really going after a very small market with that type of pricing."

According to Amoroso, within five years, "virtual networks will capture about 14% of all wireless subscribers, or about 29 million customers, and generate annual revenue of about $10.7 billion."

Yankee Group analyst Linda Barrabee added that in the U.S., the top network operators, Verizon, Sprint, Cingular and T-Mobile USA, "control about 80% of the content distributed on the phones." She said, "The challenge not only for ESPN but also other entities trying to dance into this space is to convince customers to move to a new service. How do you lure those folks away? Well, ESPN already has an existing base. They've got the brand and the content."

IDC: Significant Growth in Small Form Factor and Mobile PC Hard Disk Drives to Boost Worldwide HDD Semiconductor Market

IDC has issued a new report that finds "significant growth in the small form factor and mobile PC hard disk drive (HDD) segments will more than counterbalance flat growth in the desktop PC and enterprise HDD segments to accelerate worldwide semiconductor revenue growth through 2009." IDC predicts that "small form factor HDD chip revenue will represent nearly a quarter of the market by 2009."

Shane Rau at IDC said, "It is critical for HDD semiconductor suppliers to become mindful of end demand as volatile consumer markets grow to drive more and more HDD unit shipments. Consumer markets are also perilous for the growing conflict they represent between HDD storage and NAND flash memory storage."

IDC forecast the following trends:

  • System-in-Chip (SoC) will be increasingly adopted across all form factors
  • Perpendicular recording technology will take hold over the forecast period
  • NAND flash memory's adoption in portable devices will force small form factor drives to move into devices that require higher storage capacity than NAND can support economically

Jupiter: French regulatory issues?

Thomas Husson posts his thoughts on the potential regulatory issues for mobile TV in France at the Jupiter Analyst Weblogs. As he notes, it "is not yet clear whether the new TV on mobile market will be regulated by France’s media watchdog, the CSA, or by the ARCEP (ex ART) telecoms regulator."

Husson points out "the reality is that boundaries are being blurred and that it is extremely difficult for national public bodies to adapt quickly to such a changing environment with new technologies being introduced. All the more as the European commission is playing an increasing role in each national regulatory framework."

He also mentions that "the "conseil de la concurrence" will decide tomorrow and announce on Thursday its decision on a possible collusion between French mobile operators (accused of having agreed on a sort of cartel a few years ago). From industry sources, the fine could amount up to hundreds of millions euros. This does not include a sort of class action (does not really exist in the French law)that could be conducted by individuals..."

Tuesday, November 29, 2005

Cingular Teams with Orange

Wireless Week reports Cingular has entered into a partnership with Orange that will enable its WorldView corporate contract customers "to obtain discounts by counting usage logged while on the Cingular network in the United States and on the Orange network in Europe."

Jeremy Green at Ovum pointed out the partnership represents Cingular's "largest expansion of the WorldView program" and said, "Orange and Cingular will coordinate sale and bid management efforts so as to provide a single response to MNC (multinational corporations) tenders. This is clearly what users are asking for, and reinforces the impression that Orange has lifted its game in addressing MNCs requirements."

According to the article, the agreement "initially will cover networks in the United States, the United Kingdom, France, Belgium, Switzerland and the Netherlands. The companies plan to extend the reach of the program to Romania, Slovakia and Poland in the first half of next year and then to Spain later in 2006."

Jupiter: Seniors and Mobile Services

Julie Ask posts at the Jupiter Analyst Weblogs about her real world experiences using SMS and other mobile services while accompanied by her 85 year old grandmother. Ask finds that her grandparents are probably not the prime target audience for consuming mobile data and services. She concludes that:

Our consumer surveys test up to the age group, 55 years or older. Among those in this age group, 14 percent have used SMS. This is also an online survey so excludes those who may own cell phones, but are not online. My grandmother is 85. She's not online, but my grandfather was a regular user of WebTV until recently. They have a VCR, digital cable and cell phone which probably makes them tech-savvier than most in their late eighties.

Music Players and Game Consoles Are Topping Lists

The New York Times reports a major shift is taking place in the holiday shopping scene as mobile devices make up the top spots in the top 10 list of desired gifts according to retailers and analysts. Topping the lists are the Apple iPod and digital cameras.

Also going strong is the Sony PSP. Michael Pachter at Wedbush Morgan Securities predicted Sony will sell "one million units sold during the holidays." Ted Schadler at Forrester Research added,
"The PSP is very hot. The form factor is right; you can use it to browse the Web and play movies, and it fits in the hand."

Other than the iPod, another hot area will be digitial cameras with growth coming from "both from first-time digital camera owners, as well as customers upgrading to new cameras with greater resolution and more features." Schadler predicts "15 million households to buy digital cameras this year as prices fall."

Hard to believe the holidays are right around the corner. I haven't even started shopping or thinking about it for that matter, but I'm sure some mobile devices will make the list...

Texas Instruments offering new phone chip for Asia

Reuters reports that Texas Instruments will "introduce a high-speed wireless chip for use by a wider set of mobile handset makers, especially in advanced Asian markets." The W-CDMA based chip was developed in collaboration with NTT DoCoMo.

Yankee Group analyst John Jackson said, "This will allow the manufacturers to get 3G phones to market with the same bang but less buck." According to analysts, TI's new OMAPV2230 chip "represents a move beyond the custom W-CDMA chips TI makes for its major customers" including Ericsson and Nokia.

Will Strauss at Forward Concepts said, "Without the standard chips they wouldn't be able to expand their market outside of their two biggest W-CDMA customers." Strauss predicted "about 46 million W-CDMA phones are expected to be sold in 2005 with sales expected to grow to 90 million phones in 2007 and about 255 million in 2010."

Nintendo makes its Wi-Fi move

The Seattle Times writes about Nintendo's efforts to move its gaming experience to the online world and make it wireless to boot. The article details how the company is trying to differentiate itself in the ultra competitve gaming sector with the Nintendo DS and the Nintendo Wi-Fi Connection, which made a lot of noise at launch due to its deal to provide free access at McDonald's restaurants.

Mike Goodman at Yankee Group thought thee Wi-Fi service was "a good move for Nintendo, though the company is still playing catch-up to Sony's PSP, which was wireless out of the box." He said, "They deserve credit this time because at least they're not letting the market pass them by. They totally missed the boat on online game play when it came to GameCube."

Cheaper mobile email could squash Blackberry

Techworld picks up an IDG New Service story about the challenges Research In Motion face regarding growing competition in the mobile email space. According to the article, the market is largely untapped with RIM controlling a majority of the market so far with about 3.65 million Blackberry users.

Andrew Neff at Bear Stearns said, "For now, BlackBerry is the only game in town, and [RIM is] pricing it that way." Microsoft, Nokia and other companies are attempting to make inroads in the space, although Ben Wood at Gartner noted, "When all is said and done, Nokia is primarily a mobile phone company. Any additional activities are largely incremental."

As mobile email extends beyond the enterprise to a wider audience, cost and convenience will go more hand in hand. Neff added, "What customers want is their e-mail, and if there are lower-cost alternatives, that is a competitive threat to RIM. I am loyal to RIM, but I am really loyal to my e-mail."

How Nintendo Took a Bite out of Sony

Business 2.0 writes about the mobile gaming battle brewing between the Sony PSP and the Nintendo DS. The article aptly notes that "fancy hardware doesn’t sell game machines; it takes great games to sell fancy hardware."

While the PSP has garnered most of the mindshare due to its sleek design, slick marketing and multi-purpose potential, sales of the DS has been gaining momentum. Richard Doherty at Envisioneering said, "There seems to be an uptick in sales."

What's driving DS sales is compelling content that takes "full advantage of the DS’s sophisticated hardware capabilities to showcase what the machine can do." Case in point is the best-selling, innovative game, Nintendogs.

Envisioneering analyst Doherty added, “The DS has a very radical design. It’s taken developers a little while to take advantage of that.”

Let's hope someone does the same with the PSP because right now the content is far from compelling....

Vodafone launches own brand of e-mail service with Visto

RCRNews reports that Vodafone launched a new "mobile e-mail service in the United Kingdom under its own brand of Vodafone Business Email. Vodafone is working with Visto for the service, which already has been launched in other European countries, and will coexist alongside "Vodafone's existing Blackberry products and Microsoft Exchange e-mail product."

Jeremy Green at Ovum said, "Vodafone makes much of the fact that it can offer potential customers a variety of different e-mail solutions to match their particular needs. The reality is that its Visto launch is an intelligent response to its situation between a rock and a hard place. The rock is Research In Motion-whose brand strength means that many customers ask for Blackberry rather than wireless e-mail; Vodafone must therefore endure the structure of the deal that RIM offers, even though it isn't particularly attractive.

"The hard place is Microsoft, whose enhancements to Exchange 2003 mean that user organizations can offer something very much like push e-mail, via scheduled synchronization, to end users with Microsoft devices. Vodafone knows that some of its corporate customers want to go down this route, even though this leaves it, as mobile operator, fulfilling the dreaded bit-pipe role.

"Vodafone's response is as smart as is possible under the circumstances. In principle, it offers all three kinds of solutions-five really, since both the Visto and the Blackberry products come in both hosted and corporate firewall versions-and provides its sales teams with a software tool to help diagnose the customers' real requirements," Green concluded

Monday, November 28, 2005

Dean Bubley: Killing Tme in Korea?

Dean Bubley posts at his Disruptive Wireless blog about his observations about mobile device usage while traveling in Korea. During his visit, Bubley noticed a lot of usage of personal technology, "not just cellphones, but also huge numbers of MP3 players (but few iPods), and also "proper" digital cameras." He also noticed that:

Koreans use their phones a lot. Sit (or more likely stand) on the Seoul subway, and there is a large percentage of people pecking away at keys (mostly games or SMS), and a substantially smaller number actually talking (there's decent cellular coverage in the metro). Interestingly, there are far fewer people actually talking on their phones on the streets & other locations as well.
Bubley states that mobile services in Europe, such as mobile-TV and gaming, are being pitched as ways to kill time or as info snacks. He writes that:
In the UK certainly, and probably elsewhere in "chatty" countries with few taboos about talking on the phone in public (Italy, for example), I'm wondering if larger bundles of voice minutes & better in-building coverage would just make people use more voice instead. If you've got a few minutes free - why not call your friends or family? why bother trying to download music onto your phone (and paying through the nose for it), when you could have a good gossip instead "for free"?
In the U.S. where more minutes are bundled with plans, this is partially the case. However, it also seems to depend on the mobility of society. In California, the car is king and so is voice for the most part. However, as seen in other cities and cultures (i.e. Asia), if your commute requires mass transit then data services and time killing makes much more sense...

Qualcomm advances FLO technology for mobile TV chronicles the latest from the FLO (Forward Link-Only) camp with the FLO Forum recently ratifying Qualcomm's Forward Link-Only air interface specification. According to the article, the "AIS specifies the protocols used over the air between the FLO network and a FLO device. The specification includes a complete description of the physical layer, which uses Orthogonal Frequency Division Multiplexing (OFDM) and advanced forward error-correction techniques, and a complete description of the Stream/Control and Media Access Layers (MAC). The specification enables the delivery of multiple, multimedia streams over the standard TV channel allocation bandwidths."

Albert Lin at American Technology Research said the publication of the AIS for FLO technology is a “significant step towards the standardization effort while highlighting the type of crucial role the Forum plays for all interested parties."

Coming soon: better browsing for your cell phone

The San Jose Mercury News reports that web browsing via the cell phone is finally starting to get better. Gartner analyst Van Baker said, "Usability is hugely important,. If it's too cumbersome, too complex, then people will reject it as they've done earlier."

According to Forrester Research, "the number of U.S. mobile phone customers who use data applications has already jumped from 6 percent last year to 15 percent in 2005." This combined with the move to higher-speed networks means the industry needs to improve the whole browsing experience.

One step in the right direction is Google's latest Java app for search, mapping and driving-directions. Charles Golvin at Forrester Research said, "I think that what they've done is take their usual simple interface, easy-to-access services and translated that to a pretty good product for mainstream phones."

While things are getting better, analysts note a lot still needs to be done. Baker added, "Eventually someone will get it right."

M:Metrics: 90 Percent of Mobile Gamers Hear About Games from Their Carrier; JAMDAT Receives the Heaviest on-Deck Promotion

M:Metrics has released new findings that "the vast majority of mobile game consumers rely on their carriers to inform their mobile game purchases, a trend that has remained steady over the past six months."

Seamus McAteer at M:Metrics said, "This data shows that companies who are marketing their games outside of the on-device channel face a formidable challenge. Visibility on the device deck is essential. In addition to looking to premium SMS as a means to merchandise game content on the Web, in print or on TV, mobile games publishers should focus on alternative mechanisms that deliver exposure on the deck, via a link to an independent portal that's integrated with the carrier's billing infrastructure, or through their own branded retail outlet."

M;Metrics found that JAMDAT was most heavily promoted "on carrier merchandising menus of the top tier national carriers, owning 14 percent of all game titles that received premium deck placement across the top-tier, branded carriers in the United States in the month of October." The survey also noted that the gap between male anf females was closing. "Males continue to out-download females, accounting for 58 percent of those who downloaded a game in October. In January, the split was 66 percent male, 34 percent female."

US Mobile Subscriber Monthly Consumption of Content and Applications
M:Metrics Benchmark Survey: October 2005
Activity Projected Monthly
Reach (000s)
Percent US
Mobile Subscribers
Used Text Messaging 57,989 32.0%
Retrieved News and Information Via Browser 17,140 9.5%
Used Photo Messaging 15,504 8.6%
Purchased Ringtone 15,669 8.7%
Used Personal E-mail 12,143 6.7%
Used Mobile Instant Messenger 10,310 5.7%
Used Work E-mail 6,614 3.7%
Purchased Wallpaper or Screensaver 6,410 3.5%
Downloaded Mobile Game 5,331 3.0%
Source: M:Metrics, Inc., Copyright 2005. Survey of U.S. mobile subscribers. Data based on the month ending October 31, 2005, n= 11,846 U.S. mobile subscribers.

The game publishers and game titles receiving the most premium deck placement in the month of October were:

Top Game Publishers % Appearances Most Promoted Title % Appearances
1. JAMDAT 14.4 % 1. World Poker Tour - Texas Hold 'Em 2.2 %
2. MForma 10.8 % 2. NCAA Football 1st and 10 1.7 %
3. THQ 9.0 % 3. Bejeweled 2.0 %
4. I-Play 9.1% 4. Jewel Quest 1.9 %
5. Gameloft 9.0 % 5. MLB Baseball 2005 by JAMDAT 1.4 %
This data outlines one of the key problems for game developers trying to promote their wares to potential mobile phone gamers. Unless you have the cash and bulk of a JAMDAT, your title will be buried in the deck. Given the costs to develop and then port games to the myriad platforms and handsets, mobile game publishers will need to get creative promoting their games if they want to see a return on their efforts....

Samsung may dull Motorola's Razr edge reports the best-selling Motorola Razr can expect to face challenges from Samsung in 2006 when it "unveils a slew of copycat thin designs."

Neil Mawston at Strategy Analytics said, "The Razr is a killer phone, among the world leaders in volume terms, as it is differentiated heavily from the competition by its ultra-thin form factor -- it has a visual 'wow' factor that few devices have at this time. But Motorola today is experiencing a Golden Age that will be difficult, if not impossible, to sustain in the next 2 to 3 years, as copycat ultra-slim designs will reduce the uniqueness of the Razr through 2007 -- the gap between Motorola and the rest will close in 2006 or 2007."

Samsung's first Razr lookalike, the V740, was launched in May and "its successor, the V8400 slider phone, in October." On Samsung's home turf, Ovum "estimates that 500,000 Razr units were sold in South Korea in the two months of July and August, while telecoms industry data show it was the country's top-seller in September."

Nathan Burley at Ovum said, "We think Samsung has a clear case of Razr-envy. It has led in technologies like imaging, though its designs may have lagged. But it is doing lots to improve its designs and can hold its own. I wouldn't write them off just yet."

While Samsung and Motorola wrestle in the ultra-slim market, Nokia remains a dark horse.

Strategy Analytics' Mawston noted that Nokia has stayed quiet in this high-stakes battle. He said, "Nokia to-date has not been clear in outlining its ultra-thin handset strategy. We expect an ultra-thin GSM phone from Nokia in 2006, simply because it needs one fast, to blunt the existing competitive edge of Motorola. Nokia's made no effort to compete in the thin phones segment, instead they've gone for fat phones. The thinking seems to be they do not want to be in the 'Me Too' category."

NAND Continues to Set Records, Semico Says

Electronic News reports that "digital consumer applications are driving the NAND market to grow faster than any market in the history of the semiconductor market, according to Semico Research. Semico recently increased its "2006 forecast from $11 billion to $13 billion, or a 25% jump over 2005’s revenues of $10.2 billion."

Jim Hand at Semico said, “One thing is clear about the NAND market, it is hard to over-forecast! Suppliers who ramped their capacity aggressively early in the year are finding that they need to add still more to even start to satisfy demand."

The article detailed some of the ways the various players in the industry were trying to increase supply and match demand.

Handy concluded that “Major NAND users, OEMs like Lexar Media, Kingston, Viking Technologies; camera companies, like Nikon, Olympus, Kodak, Canon, & Fuji Film; MP3 Player companies like Apple, Creative, and Sony, and some of their suppliers like SigmaTel and Silicon Motion, are faced with supply constraints that are forcing prices up and causing demand to be tight."

Sunday, November 27, 2005

Ovum: TeliaSonera Denmark trials Motorola WiFi FMC

Jeremy Green and Carrie Pawsey at Ovum write that TeliaSonera "is extending its existing UMA trial with Motorola to include WiFi-capable handsets and access points. The trial, which has hitherto been based on UMA using Bluetooth as the bearer, also marks the transformation of UMA from a de facto specification to a technology standardised by 3GPP."

Green and Pawsey believe "the advent of UMA as a full standard has important implications. It means that operators can now have more confidence that UMA-based solutions will work across vendors' offerings - so that there will be interoperability between one vendor's devices and another's access points."

According to Ovum, the trial is based on the Motorola A910 handset, "which supports WiFi 802.11b/g and all four GSM bands," and "is aimed at the mid-market rather than the high-end or enterprise user."

Green and Pawsey believe that this approach "reflects Motorola's belief that UMA is primarily applicable to the consumer market - particularly since the non-availability of access-point handover in either Bluetooth or WiFi makes it hard to deploy for enterprise customers who need coverage across large sites. This is a shortcoming in the bearers rather than in UMA per se, and will not be fixed simply by the introduction of FMC solutions based on SIP/IMS."

In the end, they note "Motorola says, SIP-based FMC solutions for enterprises are still one to two years away..."

Switched On: From PC to PSP, Sony-style

Ross Rubin at NPD Group reviews Sony's PSP Media Manager at his regular "Switched On" column for Engadget. Like most other reviews, the software is viewed favorably, however as Rubin notes:

Available for just under $20 online or $30 in a box (which also includes a USB cable and five free songs from the Connect music service), the offering attempts to bring Sony closer to the tight integration of hardware and software that Apple has benefited from with the iPod and iTunes. Sony’s decision to charge for the software seems short-sighted compared to Apple’s approach with iTunes. Unlike iTunes, which is a useful music jukebox even to those without iPods, PSP Media Manager has almost no incremental value to anyone but PSP owners.
I wholeheartedly agree. You have to wonder what Sony is thinking. Do they purposely want to alienate their customers? First, the homebrew folks and now charging for software that should come bundled for free (not to mention the recent DRM PR nightmare). It doesn't help that compelling content (i.e. games) is still sorely lacking. Sony seems like a rudderless ship that is woefully out of touch with its target audience.

I'm still holding out hope that the Sony PSP will turn out to be more than an expensive wireless black brick, especially since for about $150 more my son could have picked up a XBOX 360 for the home. I guess there's always the PS3, whenever it gets released....

Saturday, November 26, 2005

ESPN looks to tag along with fans on the go

A couple of articles take a look at the Mobile ESPN MVNO service, which began selling via the website on November 25. Starting out with a $400 handset and premium-priced services, Mobile ESPN is not for the budget-minded, but it target sports nuts, who must have 24/7 access to the latest sports highlights and content.

USA TODAY, Dave Linsalata,at IDC, pointed out that ESPN "is the first "really big" brand name to create its own cellphones — although he says there's been a Barbie phone — and might have an edge over rivals by being able to quickly speed highlights from its TV games."

Over at CNNMoney, Linda Barrabee at Yankee Group added "If you look at what resonates, what kind of video do you want live instead of waiting to get home, it's really about sports and news."

Will the pricey service fly? Who knows, but if you're going to shell out the big bucks for the handset and service, it better deliver great, timely content that you can't get anywhere else in the mobile universe...

Hooray! New Garmin Forerunner 305 GPS/training wristwatch?

After going off on a tangent last weekend to talk about my favorite mobile device, the Garmin Forerunner 201 speed and distance monitor wristwatch, it looks like my prayers will soon be answered with a new and improved version that will come out hopefully in early 2006.

According to a rumor posted at Sportsim Weblog, Garmin will be announcing the Forerunner 305 at CES in January.

The rumored new model will sport improved GPS reception via better chipsets and antenna placement, relatively smaller wristwatch design and include a heart rate monitor. Although still nowhere close to being high fashion, it does look more like a watch. A geek's watch yes, but still better than the 201. I hope this rumor is true because I definitely want to add this to the top of my must-have gadgets....

Weekly Roundup

A roundup of mobile analysts in the news for the week ending November 26:

  • Van Baker at Gartner via the San Jose Mercury News about mobile phone personalization
  • Mark Lowenstein at Mobile Ecosystem via CommsDesign on handsets moving towards more business features and Linux
  • Roger Entner at Ovum via the Atlanta Journal-Constitution about AT&T and Cingular
  • Lewis Ward at IDC via the San Francisco Chronicle about getting hip to text messaging
  • Albert Lin at American Technology Research via the San Diego Union-Tribune about Samsung to produce Qualcomm phone chips
  • Michael Gartenberg at JupiterResearch via the Detroit Free-Press about Apple iPod's keeping up with demand
  • Carmi Levy at Info-Tech Research Group via about Research in Motion bring jobs to Nova Scotia

Friday, November 25, 2005

Jupiter: French Football Mobile Rights

Thomas Husson posts at the Jupiter Analyst Weblogs the French Football Association will "launch a RFP for UMTS football rights on December 17th." Orange is owning the currently owns the rights until June 2006. Husson point out:

A major trend affecting the value chain is the fight for mobile rights between broadcasters, mobile operators, producers (ie Endemol, Freemantle) and other content right owners. The latter tend to fragment rights on each platform to maximize additional revenues, allowing mobile operators to acquire content and to compete with media/ TV companies. Legal issues around mobile content are extremely complex and many music and images streamed or downloaded around mobile video content have not been cleared.

RIM numbers may not add up: analysts

CNET reports that analysts are scratching their heads after Research In Motion announced it will "have fewer subscribers but revenue should be in line with estimates."

According to the article, RIM has lowered "its forecast for new subscribers for the third time this year. Third-quarter numbers have been cut back by 8 percent for the rest of the year. The company blamed the revision on two new BlackBerry models that failed to ship on time."

Brad Akyuz at Current Analysis said, "Honestly, I do not see them meeting their objectives without adding subscribers and releasing these products on time. The 7100 from Cingular is nearly a year old and people have been looking for the 8700 with Intel inside, so RIM needs those devices."

According to Todd Kort at Gartner, the 7100 series comprised 20 percent of RIM total shipments, and "RIM shipped 188,000 of its 7100t (as in supported by T-Mobile) in its fiscal second quarter."Kort pointed out that "the more than 862,000 traditional PDA-style units that RIM claims it shipped in the same time period and the shipping slip up will hurt RIM but not kill Q3."

Kort said, "They do have a substantial server business and just released BlackBerry Enterprise Server version 4.1, so they could make their revenues up in that area. That will in effect lock in their customers even more because it should lower the cost of ownership of a BlackBerry system."

Akyuz added, "Going forward, you might see an increase in the software part of the business, but that won't happen in one quarter."

The last concern is the pending patent litigation and the threat of "an injunction forcing RIM to stop shipping product to U.S. customers until it repairs relations with Virginia-based NTP."

Kort said, "There is concern by some clients but we've told them to proceed as usual and not panic. We tell them it is prudent to consider the alternatives, but the other ones out there are not that good right now."

Thursday, November 24, 2005

Verizon Wireless files suit in phone spam case reports that Verizon Wireless "has filed a lawsuit seeking an injunction against a Florida firm that it charges with sending thousands of unsolicited text messages to Verizon customers' mobile phones."

According to the suit, "98,000 spam messages were sent on behalf of Ormond Beach, Florida, firm Passport Holidays telling Verizon customers they had won cruises to the Bahamas. Ovum analyst Roger Entner noted "U.S. wireless operators are being more vigilant about such incidents, which could cost users and carriers dearly."

Entner pointed out that wireless operators "need to be even more careful than Internet service providers because the stakes are higher. He said, "While it is very annoying to get spam in your e-mail account, it doesn't cost you anything, whereas on a wireless phone it costs you up to 10 cents a message."

According to Entner, "even if Verizon received messaging fees from each of the 98,000 customers who was spammed, it could have lost anywhere between $500,000 and $1 million if each one had called customer service to complain," who assumed "such calls cost the company between $5 and $8 on average."

Entner said "In the few cases where somebody is stupid enough to do it, at least the carriers are stepping up to the plate."

Wednesday, November 23, 2005

Digital satellite radios take on iPods covers a recent report from JupiterResearch that finds the "US digital satellite radio market will surge from its current installed base of 12 million units to 55 million units in 2010."

Michael Gartenberg at JupiterResearch said, "Transportable devices will lead the installed base mix with sales being driven by wide device selection and lower price points. However, in-vehicle interest has been strong. Twenty-three per cent of online consumers we surveyed demonstrated a strong interest in the service, but overall only six per cent of online consumers have satellite radio."

Jupiter predicts that "transportable devices comprising both plug & play and handheld units" will make up 60 percent of sales in 2010. According to the report, XM Satellite and Sirius "need to move beyond the car and integrate satellite radio into other devices in order to spur growth." One area pointed out by Jupiter is mobile phones, which can take "advantage of fast wireless networks to offer existing internet streaming services to current and new customers."

David Schatsky at Jupiter Research added, "The signing of big deals such as Howard Stern and Major League Baseball has raised the stakes for XM Satellite and Sirius, even beyond the initial capital outlays for satellites and subsidised hardware. The primary challenges for Sirius and XM are price and competition with other portable media players and music services, such as iPods and iTunes respectively."

Personally, I think the high subscription rates for satellite radio are an issue, especially when compared to the costs for music streaming on cell phones...

visiongain intelligence: Mobile gambling to hit mass-market in Q2 2006

U.K. firm visiongain intelligence predicts mobilegambling with take off in Q2 2006 "as gambling operators develop their remote operations." The firm estimates that "the mobile gambling market will generate revenues totalling $4.26 billion in 2008."

Jean-Pierre Aubertin at visiongain said, "As regulatory, technical and other challenges are gradually resolved, gambling operators are expected to begin actively marketing mobile gambling to their customers, starting in the middle of 2006. Initial trials of mobile gambling sites have confirmed the channel as viable sources of income for gambling site operators such as William Hill and Ladbrokes."

Analysts Doubt Ericsson/UTStarcom Deal

Light Reading writes about rumors in the Chinese press that Ericsson is considering acquiring UTStarcom after Ericsson CEO Carl-Henric Svanberg "reportedly said Friday in Guangzhou that his company is engaged in talks to acquire a Chinese company. According to the article, "Ericsson has expressed an interest in moving deeper into the network infrastructure business in China."

American Technology Research analyst Albert Lin said, "I don’t know how much credibility to put into that. The last time I talked to the Ericsson guys, they said the biggest problem is not UTStarcom’s technology. The biggest problem is: How do you integrate what they used to do [the PAS business]? Ericsson got out of the handset business because the revenues were so unpredictable from quarter to quarter. They liked the predictability of infrastructure sales."

Joe Noel at Pacific Growth Equities also noted another reason why a deal for UTStarcom may not be in the cards: an ongoing SEC investigation. Noel said, "It’s not very likely that a big, reliable company like Ericsson would go after a company that has an investigation like that going on."

Both analysts agreed that UTStarcom's IPTV platform was attractive. Ericsson officials "are not interested in the PAS business," Noel opined.

Lin thought IP video might be a potential hedge for Ericsson. He said, "UMTS sales were growing so well, but they are looking at slowing growth for that in the future. They may want to lower their dependence on that and get more involved with wireline infrastructure. That’s part of why they want to get involved with IP video."

Cell Phone Sales Up 22% in 3Q

The RED HERRING covers a recent Gartner report that claims "mobile phone sales worldwide climbed to a record-breaking 205.4 million units in the third quarter, a 22 percent jump from the same period last year." According to Gartner, it was the “biggest quarter on record” and the firm is "increasing its worldwide mobile phone sales forecast to 810 million units in 2005."

Carolina Milanesi at Gartner said, “Year-on-year sales grew in all regions as replacement sales in mature markets such as Western Europe and North America continued to drive growth, while users in emerging markets joined mobile networks and acquired their first mobile device."

Sales in Western Europe reached nearly 40 million units, mainly from replacement sales. Milanesi said, "Users in this region continue to be attracted by new models coming onto the market, and vendors shipped quite a few new products in the third quarter,. Operators in Germany and Italy recorded an excellent quarter with the addition of more than 1 million new subscribers in a single quarter."

The North American market grew slightly to 36.3 million units. Hugues De La Vergne at Gartner said, "Despite a slowdown in new subscriber growth, the mobile device market grew sequentially by over 800,000 units, thanks to sales coming from an increase in churn."

The Asia-Pacific region saw sales of cell phones reaching 52.2 million units in the third quarter, which was a 27 percent increase over the same period last year. Ann Liang at Gartner commented, "In China, the buildup to the Golden Week Holiday, which falls on the first week in October, helped to boost sales at the very end of the quarter. Lower-tier phones aggressively priced by operators attracted new users in high-growth third- and fourth-tier cities."

Japan's third-quarter saw handset sales of 11.3 million units with WCDMA handsets overtaking personal digital cellular (PDC) phones for the first time. Nahoko Mitsuyama at Gartner said, "While seeking a new killer function, operators and vendors tried to spread their portfolios to meet varied user needs. Consequently, the number of models available in the market increased almost 30 percent on a year-on-year basis."

3G Breakthrough In Europe Not Seen This Christmas

Dow Jones reports that although 3G services in Europe are picking up momentum, "analysts don't expect a 3G phone to be the must-have Christmas gift this year."

Neil Mawston at Strategy Analytics predicted that "only 14% of around 55 million mobile phones sold in Western Europe in the fourth quarter will be 3G-enabled," which is up 8 percent from the beginning of the year but still slower than expected.

According to Strategy Analytics the Hutchison and Vodaphone were the two biggest 3G players in Western Europe with around 87% of total 3G subscribers at the end of June. Mawston said, "It will be mainly Hutchison and Vodafone for the rest of this year."

Dario Talmesio at Informa believed "there will be substantial pickup of 3G in some countries in the fourth quarter, with progress on a wider scale next year." He said, "In 3G-oriented countries such as Italy and the U.K., around 30% of mobile phone sales in the fourth quarter could be 3G."

At the same time, Gartner warned "there will be a buildup of inventory of 3G phones as consumers fail to pick them up." Carolina Milanesi at Gartner said, "Operators will fail to have their bright 3G Christmas."

Tuesday, November 22, 2005

Dean Bubley: Service, application or feature?

Dean Bubley writes at his Disruptive Wireless blog about "how differently the IP and mobile worlds treat 'things that people can do with their phone & the network.'" Bubley outlines three main schools of thought:

  • "It's a service" - which means "we, your carrier, will install a bunch of complex kit, maybe customise your end device, and bill you for using this thing every time/month/per-byte/etc. We might also try & charge you for using someone else's service, and bill you on their behalf."
  • "It's an application" - which means "we, your carrier, will try and sell you some software that makes this thing work, and maybe even host it for you. However, you will 'own' it, which means that any problems are yours to solve"
  • "It's a feature" - "we, your carrier, are annoyed that Microsoft / Symbian / someone else has bundled this in with the software of the phone, and that it connects to some server outside our control, relegating us to the role of 'bit pipe', without any chance to earn extra revenues, even if we're adding no appreciable extra value".
Bubley adds a fourth school of thought, which is "It's bait for out community/advertisers/OS, and if it's not good enough, we'll keep adding extra bits until it is." Bubley concludes wiith:
It strikes me that one of the things that IMS will enable is much simpler service vs. application vs. feature arbitrage. Of course, this isn't the IMS intention at all, which is purely about services - but to make IMS work, it seems likely that phones (and networks) will need such a lot of upgrade in terms of "smartness" and performance, that the feature & application stuff will probably sneak in regardless.

Jupiter: AT&T, or actually at&t, is Back!

Joseph Laszlo posts his thoughts about Cingular renaming itself at&t at the Jupiter Analyst Weblogs. As Laszlo points out, it is very ironic after "the huge marketing push to convert AT&T Wireless subscribers over to Cingular, and to rebrand all the retail stores, etc., in the wake of Cingular's purchase just a single, short year ago."

Regarding SBC's CEO saying the new corporate image is more trendy and modern, Laszlo concludes:

Trendy and modern. Perhaps. But for a company that's trying to be about the future of broadband and TV, AT&T is not the name I'd think of first. Though of course, nor is SBC. Maybe AT&T should launch a branding campaign around "the second 'T' is for 'TV.'"

Strategy Analytics: LG Heads Up Mobile Device User Satisfaction Index

Strategy Analytics has issued a consumer survey that finds LG had the highest handset satisfaction ratings "across 20 critical product attributes in the US and W. Europe."

According to the survey, "LG owners reported the highest satisfaction ratings in 17 out of 19 categories in Western Europe and in 9 out of 19 in the US, including most stylish device. Of the major brands, Nokia owners are least likely to consider their devices stylish."

Paul Brown at Strategy Analytics said, "LG tops the Strategy Analytics Wireless Device Customer Satisfaction Index on both sides of the Atlantic, with an 80 percent satisfaction rating in the US and an impressive 86 percent score in Western Europe. Kyocera Wireless achieved the second highest satisfaction rating in the US, while Sony Ericsson was rated second in Europe."

Kevin Nolan at Strategy Analytics added, "Despite improvements over the past year, half of the mobile users in the US and Western Europe still give their camera's picture sharing capabilities, as well as image quality, a failing grade."

The report also concluded that "over half of all users rate their ringtone and game download experience as unsatisfactory, while almost half of all users are dissatisfied with their battery performance."

Apple Pays $1.25B for Chips

The RED HERRING writes that Apple has maded agreements with several flash memory chip makers, including Intel and Micron, to provide the NAND components used in some iPod models through the end of the decade. According to the article, Apple "will prepay a combined $1.25 billion to Hynix, Intel, Micron, Samsung Electronics, and Toshiba over the next three months. The chip makers have agreed to deals running through 2010."

Mark DeVoss at iSuppli said, "I’ve never seen Apple reserve this many [components] before. They must have great plans for them."

DeVoss posited that the popularity of the nano and other NAND flash-based devices "could spell the end of small form-factor hard drive gadgets."

DeVoss said, "I think if companies aren’t in the [small hard-drive device] business, they won’t be getting into it." He added the NAND players will "create a threat at the lower end" of such hard-drive devices. He also noted that NAND chips are getting increasingly cheaper while hard drives have many fixed costs and cost between $50 and $70 to the BOM.

Small gadgets to spark flash-memory surge

Recent deals, such as the Intel and Micron $5.2 billion joint venture, are demonstrating the expected growth for NAND flash memory. CNET writes that the "demand for power-packed consumer gadgets like the iPod and digital cameras is expected to make flash memory a $47 billion market in 2009."

Jim Handy at Semico Research said, "Already the NAND Flash in USB drives has displaced floppy disk drives in PCs for transferring data, especially as density in NAND flash devices increases."

Handy predicted that camcorders will migrate from tape and mini DVDs to NAND flash, with some manufacturers already starting the transition. According to Semico, "NAND flash memory is becoming so popular that it's already outpaced its cousin NOR flash memory in manufacturing sales circles. NAND sales in 2005 are expected to top $10.2 billion this year. NOR flash is expected to pull in $7.6 billion in the same time frame."

Alan Niebel at Web-Feet Research said, "Higher density and higher capacity components will mean cheaper and more available NAND in the long run, at very good prices. We're playing with an unknown demand next year and possibly causing a price war with those consumers who are buying cameras, cell phones and MP3 players. As Intel begins to realize that these partnerships with Apple and others are integrated in the delivery of digital content, the greater success they will have in building their NAND business."

Niebel added that "Right now we have a shortage of NAND on the market, and that will carry over to early 2006. We're expecting the rest of the market to be very competitive in their pricing structure to deal with this new joint venture."

According to iSuppli, "NAND availability has been reduced since Apple debuted its flash-based iPod Nano in September and entered a deal to buy as much as 40 percent of Samsung's NAND output in the second half of 2005. Apple's share of global NAND sales in 2006 could reach as high as 25 percent." in a recent report, iSuppli said, "This deal is particularly positive for small and midsize NAND buyers, which are finding it extremely difficult to source sufficient quantities of NAND chips at this time."

Sprint to buy Alamosa for $3.4 billion

BusinessWeek reports that Sprint Nextel will acquire Alamosa Holdings Inc., its largest Sprint-branded wireless affiliate, for $3.4 billion. Regarding the determintaion of how much Sprint Nextel must pay to buy the remaining two-thirds of Nextel Partners that it doesn't already own, Wachovia Securities analyst Jennifer Fritzsche noted that "Nextel Partners generally trades at higher values than Alamosa and that the appraisers must treat the Nextel Partners acquisition as if there were competitive bidders, which were lacking in the Alamosa deal." She said, "As such, we believe this clause could merit an even larger premium for (Nextel Partners) shares."

Roger Entner at Ovum disagreed saying the "two companies are much different in terms of the type of subscribers they have and the technology they use." He thought the Alamosa deal shouldn't determine the Nextel Partners price. Entner said, "It certainly has impact on expectations, but expectations and actually achieved price are two separate things."

My Favorite Mobile Gadget - the Garmin Forerunner 201

This post is a bit off tangent since it contains no analyst reference. However, I wanted to ruminate about my favorite mobile device. No, it's not my Audiovox SMT-5600 Windows smartphone nor is it my son's Sony PSP. My favorite mobile device is a Garmin Forerunner 201 GPS distance and speed monitor (aka my running watch).

I've been running since high school and I'm data obsessive to boot. I want to know as much information about my runs as possible (i.e. time, distance, pace, heart rate, etc). Up until the last couple of years, trying to find out how far I ran involved a stopwatch and either a lot of guess work (i.e. loosely guesstimate pace and then calcultate the distance by dividing it into the total time - 48 minutes @ roughly 8 minute pace = 6 miles) or driving the course with my car and/or bicycle.

Luckily for the gadget geek in me, the last few years have seen several devices come to market that help measure distance as well as provide other related data. I've tried most of them including a foot pod accelerometer from Nike (too flaky) that attached to your shoe and measured speed and distance based on your stride, and a distance watch from Timex, which included a separate bulky GPS transceiver that you had to strap to your upper arm.

When Garmin introduced the first all-in-one GPS running watch (Forerunner 201) a couple of years ago things changed for the better. It's far from perfect since it's a bit bulky, it loses GPS signals on occasion,especially under heavy tree coverage or in cities, and accuracy can range anywhere from 95-99 percent. However I can live with these faults...for now.

Where it works best is when I'm travelling. I can just go out and run and get a fairly accurate idea how far I went. For instance, I'm currently down in Southern California visiting family and was able to get in my usual early morning run today. Better yet, I was then able to upload data from the Forerunner via USB/Serial cable to my laptop for analysis and send it to a website called MotionBased (recently acquired by Garmin), which packages all the data in charts and graphs, and maps the route as well (click on below and then "dashboard" to see more data on the run).

Map of SoCal II

It's all very cool. Garmin has already added the Forerunner 301, which incorporates a heart rate monitor. Now if they can make the GPS reception stronger and software more accurate, shrink the design to everyday watch size, and maybe incorporate some type of wireless capabilities then that would be killer. Or add the distance and speed monitoring capabilities to a GPS-enabled handset so folks can carry a phone for safety purposes, while measuring their ride or run at the same time. A lot of possibilities, but not for the paranoid at heart. You never know who might be tracking you....


Dean Bubley: Service, application or feature?

Dean Bubley writes at his Disruptive Wireless blog about "how differently the IP and mobile worlds treat 'things that people can do with their phone & the network.'" Bubley outlines three main schools of thought:

  • "It's a service" - which means "we, your carrier, will install a bunch of complex kit, maybe customise your end device, and bill you for using this thing every time/month/per-byte/etc. We might also try & charge you for using someone else's service, and bill you on their behalf."
  • "It's an application" - which means "we, your carrier, will try and sell you some software that makes this thing work, and maybe even host it for you. However, you will 'own' it, which means that any problems are yours to solve"
  • "It's a feature" - "we, your carrier, are annoyed that Microsoft / Symbian / someone else has bundled this in with the software of the phone, and that it connects to some server outside our control, relegating us to the role of 'bit pipe', without any chance to earn extra revenues, even if we're adding no appreciable extra value".
Bubley adds a fourth school of thought, which is "It's bait for out community/advertisers/OS, and if it's not good enough, we'll keep adding extra bits until it is." Bubley concludes wiith:
It strikes me that one of the things that IMS will enable is much simpler service vs. application vs. feature arbitrage. Of course, this isn't the IMS intention at all, which is purely about services - but to make IMS work, it seems likely that phones (and networks) will need such a lot of upgrade in terms of "smartness" and performance, that the feature & application stuff will probably sneak in regardless.

Monday, November 21, 2005

TiVo to Expand Portable Features

The Los Angeles Times reports TiVo will allows its standalone digital video recorders to save programs to iPods and PlayStation Portables. This "builds on TiVo's existing TiVo to Go feature, which enables some subscribers to transfer shows to a laptop or PC via a home network."

Stephen Baker at NPD Group thought the ability to transfer shows between a TiVo and Apple's market-leading iPod or Sony Corp.'s popular PSP "may help cement the idea that a TiVo is better than a generic DVR. Their route to success is to differentiate themselves from generic DVRs."

Rob Enderle added, "With these devices, content is king. The more content you can get on them the more valuable they are."

Unfortunately, those of us with DirecTiVo units are left out in the cold again. We don't get the TiVo to Go feature, and with News Corp/DirecTV parting ways with Tivo to offer their own DVRs, I guess it's wait and see if they will put a mobile video strategy in place...

Nano, video iPod both likely holiday winners

The San Jose Mercury News writes that Apple has the gadget-buying gift scene covered this holiday season with both the iPod nano and the video iPod.

Ben Bajarin at Creative Strategies noted brisk sales of the video iPod indicate a growing market for digital video, "but not necessarily the mass appeal of the iPod video." He said, "That's not people buying them to play them on video iPods because there aren't a million video iPods out there. It's not one of those products that will jump off the shelves. The nano is clearly the big seller now."

Shaw Wu at American Technology Research reported the iPod video "is doing very well. It's doing better than expected." In a recent investor's note, Wu wrote the video iPod is "surprisingly outselling even the very popular iPod nano.''

Wu estimated that for the quarter ending in December, "Apple will sell 9.4 million iPods, 5 million iPod nano models and 3 million iPod video versions."

Jupiter Research analyst Michael Gartenberg said "Apple has done a great job of refreshing and segmenting the product line. You wonder what they are doing in Cupertino right now."

As top dog, Qualcomm draws fire

The San Diego Union-Tribune writes a lengthy feature article on whether current king of the hill Qualcomm is an industry bully or has a big target on its back.

The company, which garners most of its revenue licensing technology and selling chips, is in the unique position of having rivals, who are also customers. The article outlines the myriad patent disputes facing the company both in the U.S. and Europe. Michael Cohen at Pacific American Securities said, "It's common for licensing and litigation to go hand in hand."

The article notes that "when the standard of WCDMA was created, it contained intellectual property developed by companies throughout the industry, including Qualcomm," which "required those companies to license their patented technology on "fair, reasonable and non-discriminatory" terms."

Michael King at Gartner Group said, "Other companies worry about, what if Qualcomm is able to exert the type of control it has had with CDMA in WCDMA. That's a pretty big fear."

Regarding the recent complaint by six companies – Broadcom, Ericsson, NEC, Nokia, Panasonic Mobile Communications and Texas Instruments – that asked the European Commission to investigate Qualcomm, King added Qualcomm "will be portrayed as the big American bully comes in and beats up these helpless European companies, like Nokia and Ericsson."

King said, "Bottom line, you're going to see both parties are right in some way. Qualcomm has very tightly controlled the narrowband CDMA market and, in doing so, has produced tremendous profit. People are looking at that and saying, 'I don't want to pay that much for wideband CDMA.'"

Alltel buying Midwest Wireless

The St. Paul Pioneer Press reports on Alltel's $1.08 billion bid to purchase Midwest Wireless and its 400,000 customers. Midwest Wireless is owned by 60 rural local telephone companies in southern Minnesota, western Wisconsin and northern and eastern Iowa.

Both Alltel and Midwest Wireless have CDMA networks, which might make it easier to integrate the two systems. Tole Hart at Gartner noted "Alltel, which has 10 million wireless customers in 34 states, has good prices on its nationwide plans, mainly because of roaming agreements with Verizon Wireless."

He thought,"Alltel may be able to improve on Midwest Wireless' nationwide coverage plans and offer a wider selection of cell phones for Midwest customers."

Consumers Down On Carriers For Cellular Phone Buys

TechWeb covers a new report from NPD Group that finds "consumers are unhappy with buying a cellular phone from carriers, giving higher ratings to retailers." According to NPD, "only 24 percent of the more than 2,100 consumers surveyed said buying a mobile phone from a carrier-owned story was an "excellent or good experience." Mass merchants, such as Wal-Mart, and electronic retailers, on the other hand, scored higher levels of satisfaction."

Nextel and Cingular were top-ranked among the carriers, while T-Mobile and Sprint were at the bottom. RadioShack and Wal-Mart scored the highest, "ranking high in helpful sales staff, variety and selection of wireless products, and store layout."

Clint Wheelock at NPD noted that the carrier store's "Achilles' heel is in knowledge and helpfulness of their sales staff." Only 1 in 4 were as ranked "extremely or very good." Wheelock said, "It's pretty typical (in the retail industry) to see 60, 70 and 80 percent in this area. The fact that they're down in the 20s is a red flag to me. These numbers really quantify that consumers are generally unhappy in the experience of buying a cellular phone."

The study also found that the majority of consumers "were repeat phone buyers, with only 14 percent saying they were buying their first handset. More consumers, 39 percent, were upgrading to better phones, while 15 percent were replacing a broken one."

I've never had the best experience dealing with Cingular's sales folks either in the store or on the phone. Granted I like to do a lot of research before making a purchase, but oftentimes I'll know more about the product line than the reps...

The Ringtone Riddle

The Wall Street Journal pens another article asking the $64,000 question - are consumers dumb enough to shell out $2.49 for a full track music download as they have been doing for ringtones? The carriers and music industry are obviously hoping so.

According to the Yankee Group, "ringtones will probably be a $500 million business in the U.S. this year and a multibillion-dollar business globally. That makes them the third most-popular wireless application behind talk and text-messaging. This spring, Yankee Group found about one-third of U.S. consumers had at least tried to download a ringtone; when asked what wireless service they'd spend money on each month if they additional cash, 13-17-year-olds chose ringtones above all else, and ringtones were the #2 choice among those 18-24."

However, as analysts point out, ringtones arevery different than music downloads. Charles Golvin at Forrester Research said, "Aside from the fact that they're built on music, they really have very little to do with one another.". Yankee Group's Michael Goodman added, "ringtones are about personalization. Music downloads are about entertainment."

The article notes Apple's iTunes helped set the 99 cent price level for music downloads to help stem the tide against illegal downloads and P2P services. Goodman said, "Hate it or love it, it is a fact of life. Anything you do in developing your business model has to take that into account."

Goodman thought "there is no market above 99 cents," and cites a Yankee Group study that found "consumer interest in buying a song download dropped 60% if the price rose from 99 cents to just $1.19."

Goodman note that at "$2.50 per song, an album would cost a whopping $25 to $30." He remarked "Given those dynamics, I don't see how you could possibly think you could get away with a $2.50 price point."

Sunday, November 20, 2005

Ovum: Vodafone exits ultra-competitive Swedish market

There has been a lot of M&A action in the mobile market, which is keeping Ovum busy. Carrie Pawsey posts her thoughts on Telenor's decision to buy Vodafone Sweden for just over euro1 billion. Vodafone Sweden is the third-largest operator in Sweden, with just over 1.5 million subscribers and a 16% market share.

As Pawsey writes the "deal says more about Vodafone than it does about Telenor. For Telenor, the benefits are relatively straightforward; it can gain synergies from its Norwegian operation and grow its business in Sweden to establish itself as a market leader in the Nordic region. Telenor currently has just under 100,000 subscribers in Sweden, through an MVNO arrangement with Tele2, which are mainly in the business segment. The Vodafone deal will allow it scope to grow."

Pawsey posits that for Vodafone the:

deal highlights the difficulties it has experienced in Sweden. Fierce price competition has broken out amongst the four network operators following the launch of Hutchison 3G in 2003, and on top of that there has been an explosion of more than 20 MVNOs and service providers. While Vodafone does have the highest ARPU in Sweden, it has seen this decline from euro41 to euro34 in just over 18 months, with no sign of it stabilising. Vodafone has also faced difficulties in rolling out its Swedish 3G network, with the regulator refusing to relax licence conditions. Vodafone is not the first operator to exit the Swedish market, Orange also decided not to launch 3G services and returned its licence in 2003.
Pawsey observes that "both Telenor and Vodafone have been pursuing investments in markets with higher growth potential than the saturated markets of Western Europe," and wonders if "Vodafone has one eye on obtaining a foot in the door with Telenor's emerging market operators as well?"

Ovum: Telefónica buys UK's O2 for £18 billion

Ovum's Marta Muñoz Méndez-Villamil takes a look at Telefónica's £17.7 billion acquisition of O2's operations in Germany, Ireland and the UK.

Méndez-Villamil thinks "O2's relatively small size in Europe, in comparison with larger players such as Vodafone, Orange or T-Mobile, makes it the perfect target for an acquisition." Her assessment of the deal is it offers Telefonica "the possibility to enter two of the largest European markets, with a combined mobile customer base of over 141 million, and mobile revenues estimated to be above $26 billion in each market. Compared to the 38 million customers and $18 billion in revenues that the Spanish mobile market has at the moment, the UK and Germany can place Telefónica as one of the largest operators in Europe."

She also believes it's a good deal for Telefónica becuase "the UK and Germany are two of the most advanced markets in Europe. O2 has managed to defend its position well whilst operating in highly competitive environments. This is something Telefónica could learn from, especially now that it faces increasing competition from Vodafone and Orange in its home market."

As for O2, Méndez-Villamil opines that it "offers the possibility to benefit from the economies of scale of belonging to a larger operator, and it acts as an entry point to one of the regions with the largest growth potential in future years: Latin America. Surviving as a small player in a pond with such large fish would have been a difficult task for O2."

Saturday, November 19, 2005

Weekly Roundup

A roundup of mobile analysts in the news for the week ending November 19:

Friday, November 18, 2005

Jupiter: MVNO Targets Very Rich/Very Stupid Demographic

Joseph Laszlo posts about high-end MVNOs and their potential target audience at the Jupiter Analyst Weblogs. Laszlo specifically references VOCE, which is targeting a very high-end demographic. He states "a $1,500 entry fee just to sign on will certainly keep the riff-raff out, and a $500 monthly fee for unlimited usage will keep the intelligent wireless subscribers away, too."

Laszlo notes VOCE will run on Cingular's network and remarks "what might be interesting would be if Cingular was willing to set things up so that VOCE customers got call priority, and were quantifiably less likely to have calls drop, and quantifiably got better voice quality out of the network. Then it might actually be worth having. But I can't see Cingular being terribly likely to do this, and there's nothing in the release about better quality of service."

He doesn't see much value add from VOCE's services at this moment and concludes

the rich-and-stupid audience segment is not a bad one. They're out there, and VOCE doesn't need to convince many of 'em that "more expensive=better" to have a very viable business model. I wish them luck at that.

Ovum: Vodafone returns to India

Robin Hearn at Ovum comments on Vodafone's re-entry into the India mobile market via the acquisition of 10 percent of Bharti Tele-Ventures for £820 million (euro1,200 million). Bharti is the leading mobile operator in India with 14.1 million customers and a market share of 22%. In addition, Bharti operates fixed line service called Infotel, "which has over 1 million wireline and broadband customers, and also offers long distance and enterprise services."

According to Hearn, "the Indian mobile market is now looking good. Penetration is under 6% and recent growth has been both consistent and strong. The market adds over 5 million new users a quarter, and over 140 million new users will enter the market over the next five years."

Hearn notes that "competition for these new customers is already fierce, but as one of few national operators with an established brand, Bharti is very well placed to exploit this."

He also points out "as a pure-play GSM operator there are obvious benefits to be achieved by importing Vodafone's scale and scope, and no chance of suffering from the technology headache that Vodafone's stake in Verizon Wireless gives it." Hearn concludes that:

All-in-all this is a good move for Vodafone's global ambitions, and although there are still plenty of growth markets out there, picking those that will deliver true value is getting harder.

Jupiter: Two views of the Sprint PPC-6700

Michael Gartenberg posts his thoughts on my latest must-have, drool-worthy gadget, the Sprint PPC-6700 (HTC Apache) Windows Mobile 5 phone, at the Jupiter Analyst Weblogs. Gartenberg, who has been testing the device, finds that it is "only slightly thicker than a Treo 650 but much more usable," and "it has great battery life, easily getting me through a heavy day of use, syncs well with my PC and uses the new WM 5 software from Microsoft which works really really welll for mobile tasks."

Gartenberg also reacts to a recent review of the device by Stephen Manes at Forbes, who wasn't as keen on the PPC-6700 and especially the latest version of Windows Mobile. Gartenberg comments:

I've been using one and my experience in no way is close to his. I wonder if we're using two different devices with the same name. I have not had a single issue with ActiveSync or the device and in fact have found the 6700 to be rock solid. I could argue about some of the other points, like round trip office documents (which no one does any better in a native file format) or the contrast on the keys is certain lighting. Pairing it with my notebook for remote access was a snap and then there's the EV-DO connectivity which made life a lot better and opened to the door to some new types of applications as well (some of which I can't talk about just yet). Overall, the 6700 in my opinion is the new king of smart phones (at the moment) based on form factor, battery life and the fact that EV-DO on the Sprint network is only $15 a month.
It's obvious after reading the review that Manes clearly did not have a good experience with the device, and Gartenberg wonders whose experience is closer to reality. I guess with Microsoft products YMMV (your mileage may vary).

I've had some issues with my Windows Mobile 3 Audiovox SMT-5600 smartphone, but it's nothing that some researching and playing around with the device can't resolve. The bigger question is whether these constantly improving (in terms of features and functionality) devices will remain as niche/enterprise products or crossover to the mainstream.

If they behave like Gartenberg's device then there is a chance, but if Manes' experience is the norm then no way. Ease of use is critical, since not everyone has the wherewithal, such as an IT help desk, knowledge or desire, to try and fix these things. Can't post anymore on this as I have to get back to the task at hand. My in-laws' PC is acting up...again...

Pyramid Research: Emerging Markets Want Mobile Data But May Not Want to Pay

Pyramid Research has issued a new study that finds "among wireless subscribers across the BRIC countries (Brazil, Russia, India, China)," Brazilians were the most interested in using wireless data services. The survey of 2500 mobile phone users asked "under which of the following circumstances they would use data services like wireless internet and mobile TV – if it were free, if the price were right or not interested at all."

The study found that "Russians are prepared to spend the most at an average of $4.23 USD per month, while subscribers in Brazil and China would pay around $4 USD per month, and Indian subscribers are only willing to pay $1.50 USD." To put the potential market opportunity in better perspective, Pyramid cited that:

In India, 20% of respondents expressed an interest for mobile data applications. While the lowest proportion of all the markets surveyed, this would still represent an opportunity of about 27 million users. If these subscribers opt to spend the $1.44/month mentioned as the preferred spending level, mobile data has the potential of generating annual revenues of $466.5 Million. Given that BRIC countries are forecasted to add an estimated 645 million new subscribers over the next five years, the mobile data opportunity is substantial.
Nick Holland at Pyramid Research said “With the unique characteristics of each BRIC country, it is imperative that stakeholders equip themselves with accurate information on the content and service expectations of end users. The propensity for data adoption varies greatly from country to country and a one-size-fits-all strategy is destined for failure.”

New Gear Improves Cellular Connections

As more and more people rely on their cell phones beyond just voice services, the Investor's Business Daily writes "many are getting less tolerant about losing a signal."

Phil Redman at Gartner said, "Cell phone users won't be too upset if a voice call is lost, but a growing number are now using their phones for data services. Not being able to access their e-mail will cause frustration."

One of the main challenges will be providing service inside homes and office buildings where coverage can be spotty. The article looks at various technologies and systems to help boost signal strength and the range of wireless networks.

Ira Brodsky at Datacomm Research said, "The most promising in-building solutions rely on smart antennas that guide and capture signals in narrow beams and cognitive radios that automatically avoid interference."

The carriers hope by improving performance they can also raise customer satisfaction levels and reduce churn. Jason Marachec at Current Analysis said, "Churn is a major problem for carriers. Users will switch from one carrier to another simply because the signal is stronger."

Gartner's Redman added, "In-building wireless system sales have been strong — doubling during the past few years. We expect a 40% compound annual growth rate through 2008."

According to the article, "the market, which has about $500 million in annual sales now, is expected to hit $1 billion by 2010."

SMS Quietly Continues to Thrive

Technology News writes that Short Message Service (SMS) still "remains a popular application and a bona fide money maker for carriers." Bob Egan at The Tower Group said, "Because it is such a simple service, it can be easy to ignore SMS but it has been a cash cow for carriers."

The article cites recent research from : Analysys that found "mobile data accounted for just 4.8 percent of U.S. operators' total mobile services revenue, compared to 15.9 percent in Western Europe and 22.0 percent in Japan."

Bill Hughes at In-Stat said, "The SMS market has been much more developed oversees than here in the U.S." Lewis Ward at IDC pointed out that until recently, consumers couldn't send messages to others on different carriers. He said, "recently, there were a number of changes so users can now mix and match text messaging services."

The article runs through the current state of SMS and where many potential applications lie. Ward noted "When you examine the numbers, you see that text messaging is a service that skews toward a young demographic."

Ward added that "There is a big push among music and video producers to use MMS to increase product awareness. arriers are finding new uses of messaging technology and users are becoming more comfortable with it, so the market is expanding."