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Technology Stocks : Nokia (NOK)
NOK 6.470-1.2%1:52 PM EST

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To: Eric L who wrote (17422)12/18/2001 3:52:40 PM
From: EJhonsa  Read Replies (2) of 34857
 
As a Qualcomm shareholder it is extremely difficult for me to get all warm and gooey about 1xEV-DO ... and as a Verizon user I'll be darned if I can figure out right now what I'd do with it if it were available to me today. ADSL fits my home and office needs and 1xRTT in a smartphone (used as a modem for my laptop) will satisfy my mobile and portable computing needs ... which I guess makes me a neo-Luddite. <g>

One word: costs. The applications might not be ready yet (though I suppose that once VOD services are out, the frame rate on an MPEG-4 stream will be a lot better with 1xEV), but we're already seeing a backlash forming against the billing structures being offered for packet data services. As I've commented previously, one of the overlooked aspects related to the success of i-Mode is Japan's extremely high cost of living, perhaps the highest in the world. As you know, ARPUs for Japanese service providers are generally in the $80 range, in spite of the relatively limited degree to which corporations cover mobile accounts.

At $5-6/MB/month, it's possible that only high-end corporate clients will be able to make heavy use of GPRS for something beyond basic WAP pages. Costs will most likely come down a bit over time once the early adopters are nabbed, and perhaps the pricing for 1x, EDGE, and W-CDMA will (hopefully) be 50-80% lower, but even at $2-3/MB/month, significant usage of the right type of J2ME/BREW applications and/or the use of WAP 2.0 in conjunction with a large-screen smartphone could further complicate matters.

So, provided that interest in data services is cultivated properly, the pricing issue for mobile applications might loom large all the way through the deployment of 1xEV-DV/WCDMA-HSDPA, with 1xRTT/EDGE/1xEV-DO/WCDMA-R4 acting as demand catalysts in the interim. It's going to take a couple more technological leaps in semiconductor/component design and manufacturing before the issue of the present inefficiency of mobile communications systems for high-bandwidth data transport is entirely resolved.

Eric
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