More Tero bashing (Oh, I forgot, Tero, you don't bash...)
Posted 18/10/99 9:06am by Tero Kuittinen
Telecom 99: The winners and the (many) losers
Yes... there were sexy concept phones never to reach the retail market.... there were
spandex-clad dance troupes celebrating Eastern European telecom companies
nobody has ever heard of... there was vicious rumour-mongering and shameless
over-hyping. Geneva 1999 was enginerd heaven. This wasn't the right place to argue
that "winner-takes-all" concept in high technology is obsolete.
Even though the crowds were huge, most third-tier pavilions like Hitachi and Bosch
were graveyards of empty desolation. Even second-tier pavilions like Siemens had
trouble attracting substantial traffic. On the other hand, some rudimentary combat
skills were necessary to gain access to Motorola, Ericsson and Nokia.
Motorola's edgy ad campaign was probably the best in town. Gritty, graffiti-style
posters with a menacing message: "It's the end of the world as you know IT". I was
hoping for an innovative inner-city gangsta theme at the pavilion, but it turned out to
look like a production number from "Saturday Night Fever". Nevertheless, the wrist
phone was a huge attraction and looked much better than the clunky Samsung
version. Tiny V-series phones still extract that "ooh" reaction from much of the
audience.
The industry concern seemed to centre on Motorola's spectacularly bad network sales
numbers announced during the Geneva meeting. The consumer focus is probably a
necessary counterweight to the seriously underperforming infrastructure division.
Paging unit and Iridium remain the two most malignant growths at Motorola - witness
the defensive "It does work, too" ad campaign for Iridium in Geneva.
So Motorola is now balancing between the good turn-around news
(semiconductors-mobile phones) and the evil, decaying divisions (mobile
networks-paging-satellite junk). To most people I talked to this adds up to two pluses
and three minuses. Do the math.
Ericsson previewed third generation phones - on a laptop simulation level. It drew
considerable interest. The big GPRS push Ericsson is now making also created a
buzz. The analyst meeting had a hostile tone, however.
Ericsson's R380 WAP phone is probably the most anticipated smartphone model
announced so far. It is genuinely compact and the display covers most of the surface.
The problem here is Ericsson's tap dance about the shipping schedule. We might not
see this in volume until early summer, which would spell trouble. Ericsson's mobile
network division seems to be the talk of the industry, though.
It has managed to maintain a dominant position in both Latin America and Asia, which
is something no other company has been able pull off. This might become relevant in
2000-2002 - some of the competition seems to be waking up to that now. On balance,
Ericsson's traditional wireline business seems even more moribund than last year.
This is a time for tricky transitions.
Nokia's pavilion was jam-packed by dignified professionals clawing to get their paws
at the 8850 and 7110. I was mesmerized by Snake II... you can actually see the scales
and the fangs of the damn creature, the display is that much better. There are now
walls to make it harder to get at the apples.
Some of the new WAP applications actually seem to have relevance. I liked the stock
service where you can see the daily chart of a given share performance. Six lines of
text is just enough to make the CNN service work. You get a menu of leading
headlines and then choose which ones to read in detail. Detail meaning 3-6
sentences. It ain't WWW multi-media, but it's a whole lot better than existing short
message services for mobile phones.
Here's the key observation: even the existing, rudimentary text-messaging over mobile
phones is a monster hit in Europe and Asia. In Britain, mobile message traffic is
growing by nearly 1000 per cent over a 12 month-period *before* WAP. Yeah, that's
three zeros. Top that, Internet over PC. So the comparison between WAP and laptop
performance may be irrelevant.
What counts is whether WAP can deliver a substantially improved performance over
existing mobile text services. And there are reasons to believe that. Interestingly,
Nokia's Thursday analyst presentation studiously avoided references to consumer
gadgets, only mentioning them in passing. It was all about wireless LAN, IP, Bluetooth,
11 Mbps PC cards by 1Q 2000, etc. I sensed a serious annoyance at the "consumer
product company" tag. Changing that preconception is probably going to be a tall
order - perhaps that is Nokia's transition challenge of the moment.
In general, Alcatel seems to be the most loathed company around right now. It had a
hot 1998 mobile phone season, but has apparently lost momentum by clinging to the
cheapie approach that worked so well last year. Its infrastructure division is widely
derided and recent US acquisitions are deemed clueless even for a European
telecom firm.
Siemens may be getting a second wind - somewhat surprisingly, they seem to be
doing well in Asian mobile network market and the new phones are hits. More
importantly, Siemens is well-positioned to cash in on the wireless data phenom.
Everyone is talking about colour displays. Siemens was the company to deliver the
first commercially successful model.
Siemens' US acquisitions were dissed, of course. But trying to find an American
having something positive to say about a European IP-related telecom acquisition is
as hard as trying to find a European with anything positive to say about the mobile
infrastructure competence of Motorola, Nortel and Lucent.
One of the bigger surprises was the hostility towards Cisco. Apparently the
much-advertised deal with Telia is not what it could be - and the bad buzz may turn
into a problem as Cisco continues to court traditional telecom operators. On the other
hand, Lucent seems to be building positive momentum in the European infrastructure
market. Which would be a good second act after their recent success in the North
American market. Samsung talked big, but may be over-reaching with their massive
consumer product program.
Its WAP demo seemed low-end and plagued with long delays between access
commands and the delivery of data to the mobile phone. Globalstar presentation
broke the golden rule Nokia set for its sales personnel back in 1989 - never use both
hands to lift the phone from the table. It sends the wrong message. Interestingly, the
antenna volume of the Globalstar handset is bigger than the entire volume of the new
Ericsson GSM-900/1900 worldphone previewed at Geneva. ©
Related stories The Future is bright, the future is wireless
The Survivor's Guide to Geneva 2003
Bootnotes: Industry Gossip
The Register Bulletin Board
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