Weekly Wrap: Sell Them Smartphones
By Carlo Longino, Fri Feb 04 08:30:00 GMT 2005

Smartphone sales skyrocket, a DoCoMo exec reflects on the company's strategy and success, fallout from the Sprint/Nextel deal, and more.

A research firm said this week handset manufacturers shipped twice the number of smartphones in 2004 as they did a year earlier, though the devices made up just 2.5% of the entire mobile handset market. Symbian leads in terms of operating system market share, with 82%, while Nokia shipped two-thirds of all the phones.

Speaking of Symbian, the company announced the latest version of its software this week, and while it doesn't seem to include any groundbreaking new features, it does have some new tools for operators to access devices over the air. One new feature is the ability for operators to "audit applications" on users' devices, making some wonder if the features are less about customization and support, and more about control.

NTT DoCoMo VP Kei-ichi Enoki discussed the carrier's success and future this week, expressing little belief in certain features, like video calling and TV on mobiles, and also giving some insight into the company's decision to instigate flat-rate data pricing. While the move deserves a lot of the credit for helping DoCoMo battle back against KDDI, Enoki's not a big fan of the concept, saying it increases usage without increasing revenues, and that the company was forced into it by the competition.

The effects of Sprint and Nextel's plan to emerge are beginning to trickle down: Nextel has trial users of its FLASH-OFDM network from Flarion that it will shut the service down later in the year, ruffling some feathers. Nextel had a problem in that there was no clear path to upgrade its iDEN network for high-speed data, and it had been testing a number of different technologies. But given Sprint's intentions to upgrade its CDMA network to EV-DO and roll in Nextel, the problem's solved.

But don't dance a jig in celebration of the Sprint-Nextel merger until the deal closes: one report says Verizon (the parent of Verizon Wireless) is interested in buying Sprint. Given all the consolidation in the US telecom industry, wireline and wireless, it's not too surprising, though the most logical combination would be Verizon buying Sprint's fixed business, leaving the combined Sprint/Nextel as a purely wireless carrier, and letting Verizon expand outside its regional base in the northeast US.

One role Sprint is filling is to become "the carrier's carrier", the network provider of choice for virtual operators. While other operators are dabbling in providing service for MVNOs, Sprint has jumped in with both feet.

There's a bubble growing in the mobile industry, and there's a good chance it's around ringtones. While sales continue to be successful and the hype grows, there are complications and competitive pressures arising, particularly as young users wonder why ringtones cost so much more than downloading the actual song they're taken from.

Interest is growing, too, in mobile games -- this time in India, where their simplicity, low cost and easy access are fueling success. Perhaps soon people there will be playing interactive games on motion-sensitive handsets, a number of which have emerged elsewhere in Asia, letting users simulate golf swings or shoot-em-ups.

Elsewhere on the site this week, David Pescovitz shares the work of some researchers that can detect how engaged you are in a conversation, Mark Frauenfelder draws up some advances in pen-based research, Steve Wallage explains why some Japanese carriers are down on prepaid service, and Howard Rheingold takes a look at Swedish online community LunarStorm.