Weekly Wrap: The Beat Goes On
By Carlo Longino, Fri May 28 09:15:00 GMT 2004

Record companies make up for lost singles sales with high ringtone prices, Wayport shakes up Wi-Fi business model, DoCoMo drops UK 3G, and more...


The music industry will cry to anyone that will listen about how file-sharing is destroying their business and forcing rock stars used to rock-star treatment make dramatic alterations to their lifestyles (like downgrading from Cristal to Dom). They're already concerned about people "stealing" ringtones, but they're also levying hefty license fees for mp3/wav ringtunes made from original tracks -- forcing the price of those tones to cost more than a licensed digital download of the actual song. No wonder services like Xingtone, that let users create ringtones from music they already own, look like they'll be really successful.

UK mobile users now spend more on their monthly bills than they do on electricity or gas, according to a new survey. In addition to revealing rising ARPU, the survey also shows widespread interest in advanced devices: 20 percent of users already have a cameraphone, and 26 percent are interested in owning one, and nearly a quarter are interested in videophones. And while cameraphone owners might not be sending a lot of photos, they do tend to be heavier data users, the study indicates.

Wayport announced a new business model this week that radically alters the economics of the paid Wi-Fi access industry. In Wayport's deal to unwire 8,000 McDonald's restaurants, it will charge its resellers a flat rate per hotspot, as opposed to a per-connection fee it then splits with a venue owner. Wayport will charge $32 per month per location to its resellers and roaming partners, and the new deal simplifies roaming fee settlement, and should also help subsidize network growth.

Global carrier Vodafone released its earnings for the last fiscal year this week, disappointing investors as profits were hit by goodwill writedowns. Revenues were up 10 percent, and EBITDA by 13 percent. Vodafone's been getting slammed in Japan, but is aiming for a recovery this year as its 3G nets launch around the world and allow economies of scale in handsets.

Quite a bit of buying and selling going on this week: DoCoMo said it was selling its stake in the 3 UK venture back to Hutchison Whampoa for GBP 120 million, just a GBP 700 million or so loss, an unsurprising move given 3's decision not to adopt i-mode technology. T-Mobile also bought its way out of its network-sharing joint venture in the western US with Cingular, taking the carriers' shared network in California and Nevada and some spectrum in exchange for 10 mHz in New York City and $2.3 billion. Since it is taking over AT&T Wireless and its network, Cingular's got some redunancies it can sell off. Cingular also said this week it would begin UMTS trials this summer.

Supposedly fashion-forward handset line Xelibri got the chop from Siemens this week, after a year of disappointing sales. Xelibri hoped its handsets, which put looks above all else (not necessarily good look either, mind you), would catch on as fashion accessories and users would replace them as regularly as their clothes. But ugly phones short on features at prices that weren't low enough didn't make that possible.

Motorola announced a new push-to-talk platform that it says will work across multiple types of IP networks, including GPRS, CDMA2000 and Wi-Fi. Motorola says the new system is OMA standards-compliant and will facilitate simpler interoperability between vendors and interconnection of networks.

Golfers tired of losing their balls are turning to technology -- a company, RadarGolf, is embedding RFID tags in golf balls that lets users track them with a handheld sensor if (when) they end up in the rough.

Elsewhere on the site this week, Mark Frauenfelder investigates the early intersection of mobile phones and VoIP, David Pescovitz chats with William J. Mitchell, head of MIT's Media Lab, and Eric Lin wonders what happens when all these connected devices turns everybody into a journalist.