Weekly Wrap: MotoNews
By Carlo Longino, Fri Jul 30 09:15:00 GMT 2004

Motorola takes one step forward and a couple back, postive earnings roll on, and more...


Motorola was in the news quite a bit this week, springing a pretty significant surprise when it announced that Apple would be developing a new version of the iTunes music player that would be included on forthcoming Moto handsets. It's hard to call either company the clear winner in the deal -- it's certainly a boon for Motorola to latch on to the iTunes/iPod cachet, but it still remains to be seen how carriers will take to the inclusion of the software on devices they sell. Presumably, Apple wants to get the iTunes experience into the hands of some new users and turn them into iPod buyers (that, or Moto's waved a thick stack of cash in its face). But the annoucement sent some imaginations racing that the collaboration could lead to a wireless-enabled iPod.

Motorola also attracted a lot of attention for its announcement of a new Wi-Fi-enabled handset that can make voice calls over WLAN and hand them off to a GSM network. Like a similar product DoCoMo announced earlier, the Motorola phone requires proprietary Wi-Fi equipment, and can't be used at other hotspots. Not that it could anyway, since in a baffling move, it only supports the relatively unpopular 802.11a standard. The new device and accompanying system don't look like they stand much chance of success for this and a number of other reasons.

The company also took a bit of a hit when analyst firm IDC released its second-quarter handset sales figures. Unsurprisingly, Nokia lost more market share, but number-two Motorola lost even more. The overall market grew 2.5% from the first quarter, and every vendor in the top 6 increased its unit sales in the second quarter, bar Motorola and Siemens. According to IDC's figures, Motorola's 14.7% share is less than a point higher than Samsung, which has 13.9%, and the Korean manufacturer could break Motorola's long-held lock on second place in the third quarter.

More mobile companies released third-quarter earnings this week, and things continue to look good for both carriers and vendors. Telefonica Moviles, Orange, Verizon Wireless and Vodafone all gave positive reports, while equipment and handset makers Siemens and Alcatel also said their fortunes were looking up as carriers pick up network spending.

Much of that spending is on 3G gear, and as the networks become commonplace, speculation (and hype) over so-called 3.5G technologies mounts. NTT DoCoMo plans to roll out HSDPA, which boosts the speed of WCDMA networks (not unlike EDGE is to GPRS), next year, and other carriers have said they'll take that upgrade path as well. But at what point do people need to stop constantly looking for the next big thing, and focus on improving existing technologies to the point where they're usable, viable and successful?

South Korea is one of the world's most advanced -- and saturated -- mobile markets, and carriers there are looking for ways to attract users in underserved demographics, like the very young and the very old. LG Telecom has targeted the elderly with a phone with enlarged keys and a very basic feature set, while SK Telecom is going after little kids (and their parents) with a kid-proofed, ruggedized handset that can only call four pre-programmed numbers, and also works with a tracking service.

Chinese handset makers want to follow the example set by Korea's Samsung, and break out of the domestic market to become significant international players. The next segment of likely new mobile subscribers in the country have significantly lower average incomes than current users, and the manufacturers hope to sell high-end devices in foreign markets. But first, they've got to increase their research and development, make software a priority and allay concerns over the quality of their devices.

A study came out this week saying spending on wireless data products and services by the US healthcare industry is set to increase sevenfold to $7 billion by 2010. Healthcare is an interesting vertical market for wireless because of the myriad applications technology makes possible, but also because of the number of lives that could be saved and improved with it.

Elsewhere on the site this week, Howard Rheingold talks to designer Scott Jenson about why mobile services are built to fail, and how to avoid the backwards-looking thinking that dooms them, and Justin Hall takes a look at how mobile gaming companies are mixing old and new technology to enable multiplayer mobile fun.