3GSM World Congress: Day One
By Carlo Longino, Mon Feb 14 15:45:00 GMT 2005

Taking smartphones to the mass market is the early focus of the industry's annual confab in Cannes.

Last year's 3GSM saw the industry rallying around itself, regrouping after a difficult year and kicking up the hype cycle again. Coming off a strong 2004, with handset sales at a record level and 3G finally becoming a reality, the feeling at this year's event is a little bit different: as markets within the industry -- such as 3G and smartphones -- prove themselves as viable, the focus moves to taking these segments and applying them to the mass market.

Nowhere is this focus greater than in the smartphone market. A number of early announcements out of 3GSM have revolved around taking smartphone platforms, so far most popular in high-end handsets, and facilitating their spread to mid-tier devices. Smartphone sales still represent less than 10% of all handset sales, and a number of factors must change for this to grow -- most clearly the cost of developing smartphones and delivering them to market -- if smartphone sales are to meet estimates that they'll account for a quarter of all handset sales by 2008.

Microsoft is taking one tack to accomplish this: it announced a deal with Flextronics, which is best known for being a contract manufacturer of handsets, to create a Windows Mobile-based reference design to be offered to original equipment manufacturers, which can then customize the design to fit specific segments and have specific features.

Nokia announced a new version of its Series 60 platform also geared towards moving smartphones further into the market. The third edition of Series 60 will feature basic versions of things like music and video players, and support USB mass storage so users can drag and drop music from their computers. It will also support more variations of hardware, allowing vendors to more specifically target devices to particular segments, like the Sendo X2, a phone with special music features that was announced today.

Symbian, which announced its major news before the show, said its goal is to drive build costs of smartphones below $100 per unit, and CEO David Levin touted an internal study the company did which projected the lowest possible build cost of a Symbian OS device to be $78 by 2008. Both it and Series 60 look to drive costs lower by adding increased functionality to the core of their platforms, and then enabling vendors to add more features specialized to different segments or higher tiers of the market. For Series 60, this means including things like a basic music player in the core of the platform, but then a more full-featured application for a more expensive, media segment handset.

It's also clear that manufacturers are conceding to carriers' demands regarding device customization. Symbian and Series 60 touted features in their software that makes it easier and cheaper for carriers to customize look and feel, while Nokia unveiled its first handset, the 6101, designed specifically to be customized for operators. UIQ Technology was also showing off version 3 of its user interface, which features the Operator Customization Package, a system its licensees can use to enable operators to easily add customized features to devices they sell.

More evidence that the mobile industry can make for strange bedfellows: bitter rivals Nokia and Microsoft announced two deals today: Nokia said it would license Microsoft's ActiveSync protocol, allowing it to build OTA synchronization links for its enterprise devices, and the two companies signed a deal regarding mobile music. Nokia will include support for Windows Media audio and DRM on its music-focused devices, while Microsoft will support the AAC format and OMA DRM in Windows Media Player. The move will extend the reach of Windows Media-format files to the Nokia devices, and also make some mobile music services -- like the one Nokia announced today -- compatible with Windows users' PCs.