Weekly Wrap: If They Can't Beat You, Join Them
By Carlo Longino, Fri Aug 20 08:15:00 GMT 2004
DoCoMo loses a top leader to a rival, mobile developers band together, 3 reports earnings, and more...
Vodafone kicked off its week with a hearty breakfast of poached exec, stealing away NTT DoCoMo senior VP Shiro Tsuda to head up its Japanese unit. DoCoMo was left with egg on its face, having passed Tsuda over for its top job earlier in the year, but his experience in building up next-generation networks should help Vodafone in its struggle to attract 3G subscribers.
A number of small mobile software developers are looking to "unionize" in an attempt to get electronic sales distributors to lower the cut they take out from the developers' software sales. Most of the developers involved are still focused on PDA software -- 4 or 5 years ago, when PDA application downloads were just taking off, the market was flooded with competing ESDs trying to attract developers by undercutting each other's rates. But thanks to consolidation, they now keep 40% of the purchase price of each app. But shifting to mobile-phone software isn't the only answer for the developers, as apps for connected smartphones are generally purchased through over-the-air download shops run by the remaining ESDs.
Also living in the past is fixed-line operator BT, which said this week it would enable premium-rate landline SMS. Just like Web content hasn't ported perfectly and directly to the mobile arena, mobile content likely won't directly translate to the fixed arena either. It's doubtful many people will pay for popular mobile SMS content like sports scores or news updates to their home phone, when they can turn on the TV or call up a Web site and catch live action.
Perhaps BT flipped the switch in time for users to get updates from the Athens Olympics, where wireless, like most other things, has been hijacked by sponsors and unbridled capitalism. The opportunity to show off Wi-Fi's potential as a communications and logistics tool has been passed over, with visitors having to turn to aggregators for access -- especially if they're NTT DoCoMo users, as the company completely reversed an announcement last month that it would set up some temporary FOMA base stations for its roaming users there.
Saved text messages and even cameraphone photos are popping up as evidence in courts around the world these days, but police and prosecutors are coming to rely on information from carriers about suspect's phones for criminal evidence. The most common information used seems to be crude locations based on base station sites, though it's often enough to put a suspect near a crime scene. Of course, criminals are picking up on this, and trying to use it to provide alibis, sending a cohort off with their phone hundred miles of way to make a bunch of calls while they rob a bank or something similarly nefarious.
With Nokia struggling, the rest of the top six handset vendors are looking to capitalize and increase their market share, but the real battle is for second place, between current number two Motorola and third-placed Samsung. Execs from both companies said this week that things are going well and each will carry on the momentum it's had throughout the year. But Samsung's share trend is much more positive than Motorola's: at the end of the second quarter, it held 14.5%, up from 13.1% a quarter earlier, while Motorola slipped from 16.1% in the first quarter to 15.4% in the second. The most likely scenario is that both companies' sales will continue to grow, but Motorola's focus on the high end will see it lose the second spot to Samsung.
Hutchison Whampoa released its half-year results this week, turning the spotlight on its 3G operations, which though it saw great subscriber growth, still lost HKD 8.9 billion (USD 1.14 billion). ARPU looks pretty good, and customer acquisition costs are falling, but the company still has a long way to go to win over analysts and investors, which see the 3G operations as a drag on the parent company. The percentage of revenues 3 gets from data services remains lower than its 2G rivals, putting the company in a curious spot -- if it can't boost the figure and continues to get such a vast majority of its sales from voice, the bet on 3G will look pretty foolish.
3's key service offering is mobile video, and carriers in countries around the world are working to bring television to handsets, but the question remains: do users want the service? One such effort going on in Britain says broadcasting TV to mobiles can bring together TV and the Internet, and also drive 3G sales -- both of which are useful for the carrier, but may not hold much value for end users.
Virtual operators are heating up again after EasyGroup's announcement last week it was linking up with Telmore to launch a cut-rate MVNO in the UK. Telmore's runaway success in Denmark, and the fundamental changes it forced in the market there could serve as a test case for discount operators' impact on the rest of Europe. Nearly half of new subscribers in Denmark have signed up with discount operators, posing a threat to the incumbent carriers. While early thinking was that smaller players needed to emulate the discounters, larger carriers in Denmark simply bought out the virtual operators, keeping the brands alive and offering different services to its pre- and post-paid subscribers.
Elsewhere on the site this week, Mark Frauenfelder takes a look at the advances needed to provide power to the forthcoming generation of wireless microsensors, Steve Wallage says European carriers shouldn't focus on 3G this Christmas and Howard Rheingold reports on a new book that provides a great introduction to the social study of mobile phones.