Weekly Wrap: Back In the Palm
By Carlo Longino, Fri Jun 06 12:42:50 GMT 2003

Handspring completes the circle of life, first-quarter handset sales figures, and more...

Palm this week announced plans to buy one of its top competitors, Handspring, for about USD 190 million in a move that brings back a couple of high-ranking Handspring execs back to Palm, the company they founded then left in 1998. Handspring, the number-three Palm OS PDA seller (behind Sony and Palm), has eschewed plain-vanilla PDAs of late, choosing to focus on its Treo smartphones, while Palm has largely stuck to handhelds without wireless communications capabilities. Palm says the deal will close after it spins off its PalmSource software unit this fall.

Analyst firm Gartner released its take on first-quarter handset sales this week, showing total global sales up nearly 20% from last year. Nokia remained the clear-cut leader, its 35% market share more than double that of number-two Motorola. The company said that Nokia was positioned to grow its market share in Asia-Pacific and European GSM markets beyond its current 50%, and that the balance of 2003 would see a battle between Motorola and Samsung for the second-place position. It also said SonyEricsson would fight with LG for the fifth spot, as LG and Samsung, leaders in the CDMA market, strengthen their GSM offerings.

Consultants AT Kearney and the Cambridge University business school also released the results of their annual Mobinet study this week, which showed growth in mobile Internet use around the world for the first time in two years. More than a third of the 5600 people surveyed in 15 countries around the world went online with their handset in the month preceding the survey, up 25% from the previous year. Distressing for carriers, however, is that while more than 80% of those surveyed were aware of the picture-messaging capabilities of today's handsets, only 5% had used them, while in Europe, where such services have been available for a year, the number was only 3%. Interestingly, more than half of those surveyed said the innovations they most wanted to see in handsets were not advanced features, but improvements to basic functionalities like battery life and sound quality.

Looking to capitalize on their strong brands and loyal users, two companies this week announced plans to set up European virtual networks. MTV said it would launch a virtual mobile network in Sweden, running a prepaid network using Telia’s GSM system. The MTV MVNO, called “HELLO_MTV”, will offer users special music- and MTV-related content like charts and ringtones. And in the UK, supermarket Tesco said it was forming a joint venture with carrier O2 where it would sell Tesco-branded mobile phones and services using the carrier's network and technology. Look for more similar moves by other well-known brands in the future.

In another music-related marketing deal, Nokia said it had inked an agreement with Warner Music International to provide musical content for its new 3300 music player/phone. Nokia will include a memory card with the phone featuring ringtones, music clips, MMS templates and wallpapers from certain bands the label is pushing, in addition to a CD with full-length tracks from the artists. Again, this looks to be the first of many similar deals where entertainment companies will use these types of mobile content to push their wares, be they movies, music, or anything.

T-Mobile USA started selling a color version of the Danger Hiptop (rebranded as the Sidekick) this week, hoping color will give a boost to a device that despite impressive design, specs, and reviews, hasn't made much of an impact in the market. T-Mobile is also hoping to kickstart data usage by allowing customers to add unlimited e-mail, IM, and wireless Web surfing to any voice plan for just USD 20 per month. Danger's CEO also said the company is considering developing a CDMA version of the device.

Finally, Microsoft this week unveiled some details of its forthcoming Smart Personal Objects Technology (SPOT) service, the technology it says will send sports scores and weather reports to wristwatches and other simple electronic devices. For about USD 10 a month or USD 60 per year, users will be able to receive these alerts and MSN Messenger messages and Outlook appointment reminders right to their wrist or fridge or VCR or whatever. Microsoft is aiming to have the service ready in time for the Christmas shopping season, when a number of watches (costing between USD 150 and 300) will be available.