LONDON CALLING Setting a New Mobile Standard
The wireless Web has been a big disappointment, but the mobile phone industry has a new plan to change that.
By Justin Fox
Yes, everybody in the mobile phone business is nervous. They should be. The market for voice services (that is, talking on your cell phone) is maturing--at least in all the parts of the world where people can afford to spend serious money on calls and phones. The market for wireless data services (the much heralded mobile Internet) still hasn't taken off anywhere but Japan. Meanwhile Europe's cellular operators are stuck with huge debts because they paid billions of dollars for "third-generation" wireless licenses that won't start bringing in serious revenue for years. All that and economic growth is slowing all over the world, which presumably will make people less likely to upgrade to a fancy new phone just now.
That's the background to Nokia's market-shaking warning yesterday that it's not going to be selling as many mobile phones or as much wireless infrastructure this quarter as it expected. It's also why a bunch of industry bigwigs gathered in a London hotel ballroom this morning to announce an initiative they hope will get this mobile Internet thing moving once and for all.
The initiative is under the auspices of something called the GSM Association, which represents the 538 wireless operators around the world who use the GSM standard (more on that later). Basically the operators are demanding that phone makers and wireless software companies accept a set of basic guidelines for how services such as e-mail, games, and those all-important Hello Kitty cartoons are delivered and presented on mobile phones. The standards they're using are those developed by Openwave, a California company that (back when it was called Phone.com) pioneered the market for mobile Internet software.
I can't begin to explain the technological significance (or lack thereof) of any of this. But I did get the gist of what Mauro Sentinelli, the Telecom Italia Mobile chief and the driving force behind what's being called the "M-Services" initiative, was saying: The wireless Internet has been a big disappointment in Europe and the United States because there are simply too many different, incompatible versions of it. (Well, that and because most existing wireless networks only allow you to hook up to the Net by dialing up with an excruciatingly slow modem.) Most of Europe's networks are being upgraded this year to allow faster data transfer (not the third-generation, or 3G, mentioned above, but "2.5G"). So Sentinelli wants to make sure the Nokias and Motorolas and Siemenses of the world have compatible, easy-to-use Internet phones in stores in time for the Christmas shopping season.
All the big phone makers have signed on to this effort, but there are clearly some weird vibes between Nokia and the rest. That's because Nokia, along with dominating the mobile-phone market (with a 35% share, compared to 13% for No. 2 Motorola), is Openwave's main competitor in selling wireless Internet servers and software to operators. Openwave CEO Don Listwin (yeah, the Cisco No. 2 who ditched just before things got ugly there) says he had dinner with Nokia CEO Jorma Ollila three weeks ago to talk things over. "He agreed collaboration was job one for the industry right now," is how Listwin recalls the conversation, "and we could all compete in a vigorous way once we get the industry restarted. Because it's challenged right now."
This could all of course be a bunch of hooey, but the experience of GSM does indicate that collaboration has its merits. GSM is one of those acronyms that used to stand for one thing (Groupe Systeme Mobile), now stands for something else (Global System for Mobile Communications--the "C" being not only silent but invisible), and will eventually, I'm sure, stand for nothing at all. It was the name given to the cooperative effort of Europe's phone companies and governments in the 1980s to come up with common digital wireless standards.
The technology that the GSM folks (Sentinelli was one of the group's early chairmen) agreed on wasn't necessarily the best, but the emphasis on shared, open technical standards has enabled GSM--and with it early GSM adopters like Nokia and Vodafone--to conquer the world. The only real holdouts have been Japan, Korea, and the Americas. Now Japan's 3G systems are going to be compatible with those of the GSM crowd, three big U.S. wireless operators (Cingular, AT&T Wireless, and Voicestream) and a bunch of Latin American ones have joined or are joining the GSM bandwagon, and a couple days ago U.S. market leader Verizon Wireless said it was considering going with the GSM Association's version of 3G rather than sticking with the Qualcomm-developed technology it has used thus far.
As a writer for a magazine that doesn't come out often enough to bother with covering manufactured news events, I don't get to a lot of press conferences. So going to this GSM shindig was fun, especially given the unremittingly hostile tone of the questions from the press. Understandably hostile, of course, as the wireless Internet has been such a bust so far in England and the rest of Europe. One reporter even went on about how this whole thing sounded like a cartel, which really got the GSM Association guys jumping. "I'm troubled by your mention of the word cartel," said CEO Rob Conway. "I find it offensive." Then he said he'd talked to the folks at the European Commission and they were satisfied that the initiative wasn't cartel-like. Finally, Chairman Steve Fox (no relation) closed with: "Thank you for your healthy skepticism. But watch us as we approach the holiday season." Will do.
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Wednesday, June 13, 2001 |
