Weekly Wrap: Earnings Season
By Carlo Longino, Fri Apr 23 09:00:00 GMT 2004

A number of first-quarter earnings reports rolled in this week, showing the mobile industry is strong, and more...


Handset manufacturers continued to pick up on Nokia's missteps, as Sony Ericsson and Motorola both recorded great first quarters. SE reported their third straight quarterly profit, earning 82 million euros in the quarter, compared to a 104 million euro loss last year, and the company hopes to pick up more share in the balance of the year. Motorola bettered last year's first quarter by more than three times, earning $609 million on a 67 percent sales increase at its handset unit, shipping 50 percent more devices than in the first three months of 2003.

Qualcomm quadrupled its profits from last year, earning $488 million in the quarter as demand for CDMA and CDMA-based 3G products shot up. The company raised its estimates for the rest of the year, but said it can't meet the demand for phone chips at current production levels.

US carriers reporting this week had mixed results. Merger mates Cingular and AT&T Wireless didn't fare so well, while Sprint and Nextel found much greater success. AT&T Wireless lost 367,000 customers in the first quarter, losing out to number portability as well as its fourth-quarter back-end system issues, while service revenues were flat compared to last year's first quarter. Cingular added 554,000 net subscribers, but its operating income fell by a quarter to $559 million as revenue was up slightly but ARPU fell.

Sprint PCS added 414,000 subscribers in the quarter, powering a 16 percent jump in revenue and halving its net loss. Nextel's profit more than doubled as it added 474,000 users in the quarter and ARPU increased by $2 to $69.

European carriers made some news of their own this week, when a group of them said they were banding together to devise a set of standards to dictate to handset manufacturers. While the carriers said their motives were pure, it wasn't hard to speculate this was the latest move to rein in the dominance of handset vendors in another pointless "who owns the customer?" battle, particularly after the name of SavaJe, an OS company in which Vodafone and Orange have invested.

Back in the US, a survey came out saying more than half of US mobile subscribers have used data services on their handsets. It's a surprising figure for sure, with SMS the most popular data service, with ringtone and games downloads also faring well.

One place people aren't using their handsets at all is in airplanes, but an EC-backed project is looking to change that. The WirelessCabin project would set up picocells in airplanes for both cellular and Wi-Fi, then connecting via satellite to the telephone system or the Internet. It would keep mobile phones from connecting to several towers on the ground, but wouldn't keep people from annoying other passengers with their conversations.

China this week backed off a requirement that all Wi-Fi gear sold in the country had to use the homegrown WAPI security standard, a ruling that caused a flap in US-China tech trade relations. Intel, for one, had said it wouldn't follow the WAPI rules, and it and other companies had been working to somehow resolve the issue.

We've got some news of our own this week -- TheFeature has launched a new design and some new features, including moblogging and photo blogging!

Elsewhere on the site, John Alderman wonders if wireless will be the key for Sony to regain the personal music player crown back from Apple, David Pescovitz paints a picture of mobiles and art, Justin Hall dials his phone to "pleasure," Steve Wallage has the second in his series on meeting user needs, and yours truly's got a story about community-based free Wi-Fi.