FWIW...From Today's Bull Market Wireless Investor Report
2. VOICE PORTALS: THE BEGINNING BEGINS
The future of the wireless industry was revealed last week by, oddly
enough, two companies playing the same game in different ballparks, Sprint
(PCS, $24) and Palm (PALM, $46). The beginning is about to begin.
Palm
Last Monday, at the Comdex industry trade show, Palm announced plans for a
new wireless portal. The portal, dubbed "MyPalm," goes public Christmas
day and promises web-based calendaring and event services, delivery of
personally relevant information and purchase options on local and national
events, such as movie listings and sporting event schedules. The service
also includes web searching, calendar sharing, maps and directions,
e-mail, instant messaging, banking and stock trading.
Palm believes that the MyPalm portal represents an important step forward
in the company's efforts to diversify its revenue base, which is comprised
of revenue from the sale of devices and accessories, licensing royalties,
and content and access. Last quarter, Palm obtained 97 percent of its
revenue from its device business. Over time, the company anticipates that
the MyPalm portal will help accelerate the company's content and access
revenues. On the announcement Palm stock jumped nearly $6, or 12%.
Sprint
Also on Monday, Sprint announced testing of voice portal services through
BeVocal Inc., and the company expects to launch service early next year.
Some of the services include business finder (a phone book on steroids),
driving directions, flight information, traffic updates, weather, news,
sports, stock quotes, voice dialer, voice enabled e-mail and personal
information manager, and address book.
The exciting advantage of the service is the voice activation technology.
Callers dial a voice-activated dialer, enter a special key sequence
specified by the carrier, or dial a toll-free number to access a voice
portal service. By saying simple spoken commands or keywords, callers can
immediately obtain driving directions; business locations, travel
information, traffic, news, sports, weather, and stock quote updates.
New Revenue
Carriers are eager to get into voice portal services as they look to build
customer loyalty and new revenue streams. Not only do they want to
control the pipe, but they also want to control the content as well.
Carriers foresee new revenues from additional minutes of use,
subscriptions, sponsorships, ads, and transaction fees for value-added
services.
Voice activation is the killer app that will transform the wireless web
from a nifty feature into a household necessity. AT&T Wireless (AWE, $20)
is on the same track with an equity investment in SpeechWorks
International (SPWX, $42), a major speech-recognition software company.
The Market
With more than 1.5 billion phones and over 450 million mobile phone users
worldwide, the telephone will become the ultimate access device to the
Internet. According to a prominent research firm, there will be more
mobile phones connected to the Internet than personal computers by 2002.
Another research firm predicts that there will be more than 128 million
voice portal users by the end of 2005, creating a $12 billion industry.
Savvy businesses are positioning themselves now to grab market share with
strategic alliances and technological investments. For instance, Ask
Jeeves (ASKJ, $12) recently formed an alliance with Nuance (NUAN, $58), a
developer of voice interface software platforms, and General Magic (GMGC,
$4), a provider of customized voice application platforms. The move will
allow Ask Jeeves to provide a voice recognition service whereby
corporations will deliver information to customers via the telephone using
a conversational, question-answer format. Initially, the service is meant
to improve customer support services, a business forecasted to increase
from $23 billion in revenues in 1998 to $59 billion by 2003. Ultimately,
this technology will drive increased wireless usage and functionality.
It's no surprise that an endless stream of announcements similar to the
aforementioned is immediately forthcoming, and this should provide a
clearer vision of the future of communication. The surprise, however, is
that they will come from a vast array of different companies and
industries. Incredibly, last Monday's inconspicuous announcements by Palm
and Sprint may be the beginning of the beginning.
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