3GSM World Congress: Day Two
By Carlo Longino, Tue Feb 15 17:15:00 GMT 2005

Mobile music is the big story of the day here on the Mediterranean.

While handset manufacturers and operators tout the need to find compelling applications -- often hiding behind the dreadful term "killer app" -- few are offering any concrete examples of any such potential services. But even though it's not being clouded with the lingo, the industry is putting a lot of emphasis on music.

The big news from Monday night's round of events was Sony Ericsson's announcement that it plans to develop a line of phones under the Walkman brand, promising to marry the mobile phone with the world's best-known portable music name. The instant questions were if the handsets' DRM would be handled better than on previous Sony digital music players, particularly after a high-level executive acknowledged last month the company's restrictive DRM systems, put in place at the behest of its content units, had decimated its market share of the devices. Sony Ericsson execs said the phones would support MP3 files, and talked a lot about open standards, but also talked up how the handsets would work with Sony Music's online store, which of course uses the much-maligned ATRAC format. But the concept was all that was announced -- it's not until the CeBIT show next month that Sony Ericsson will show off the devices.

Motorola formally announced its first iTunes phone, the E1060, which can play music from Apple's online store. (Update: hang on -- no it didn't) It also announced more models that take design cues from its extremely successful RAZR handset, while VOIP developer Skype said it had a memorandum of understanding with Motorola with a view to having some Motorola 3G or Wi-Fi phones ship with Skype software pre-installed. Skype had earlier said i-mate would include the software on some of its Windows Mobile devices.

Motorola will also ship a phone that costs under $40 as the first device that's a part of an initiative by the GSM Association trade body to develop "ultra-low cost" devices to spur uptake in emerging markets. The group and Motorola both want to eventually sell sub-$30 handsets, and other manufacturers are said to be joining the effort as well.

Carriers got in on the fun too. Orange pumped up its 3G figures, saying it's seeing 3G ARPU of over 100 euros a month and that 80 percent of its users watch live TV, with 55 percent of all 3G sessions used to watch. But The Register digs a little deeper into the numbers surmising from the demographics -- Orange's French 3G users are 74 percent male, heavily business users and young -- that the numbers are skewed by techno-freak early adopters. The heads of some other operators didn't share Orange's unfettered enthusiasm, yet again trotting out the tired excuse that a lack of decent handsets is still holding back sales.

T-Mobile says it plans to eliminate subsidies on prepaid handsets and lengthen contracts for post-pay customers in an effort to cut costs. The operator also wants to change tariff structures, saying if it reduces subsidies it can afford to lower voice and data charges. It announced a unlimited Wi-Fi plan for the UK 20 pounds per month, and a couple new e-mail tariffs in its home German market. T-Mobile also plans to double the number of hotspots it has to 20,000 by the end of the year, and also appeared to say it would make Windows Mobile its preferred operating system for enterprise customers, a press release quoting its CTO as saying its new strategy would feature "devices that customers can instantly use, because they're already familiar with the operating system - they already use it on their PCs."

And no word from Siemens on the fate of its handset business, though the company was keen to talk up its strong networks business.