Carlo Longino's View of 3G from Cannes
"If a 3G network launches without any decent services, will anybody care?"
I consider Carlo Longino, the articulate US based "Contributing Editor" of "TheFeature", to be a rather astute observer and chronicler of the wireless scene.
[... and yes my fellow citizens of this board, Nokia sponsors (or did sponsor) "TheFeature" ... but they seem to be rather hands off relative to its content, and many articles are NOT necessarily Nokia positive.]
Carlo is already off to Hannover, Germany for CeBIT to cover the 2nd leg of the 2004 Wireless Trifecta that started in Cannes, and which will end in Atlanta with CTIA Wireless 2004.
Before the curtain unfolds in Hannover, perhaps we should review what happened at Cannes. The mood at this years 3GSM World Congress was certainly improved from last year and there were positive articles galore about the event. I think Carlo did a good job of capturing the mood at Cannes and summarizing the highlights in his journal as well as anyone.
He kicks his first article with the sentence ...
It's clear, here on the first day of the 3GSM World Congress, that the industry's got its swagger back.
Along the way he adds several sensible caveats:
People at the show are saying this is the year for 3G in Europe, but, in a sense, you'd never know. ... Nearly every network equipment vendor and mobile operator have been touting the recent and imminent widespread launches of 3G networks in Europe and beyond. While undoubtedly 2004 will (finally) see the spread of third-generation networks and services, is the industry buying into its own hype yet again? There's precious little in the way of 3G handset launches or meaningful 3G product demonstrations. ... These 3G launches are beginning to look like the proverbial tree falling in the forest. If a 3G network launches without any decent services, will anybody care?
Here is what Carlo had to say in his Cannes journal:
>> 3GSM World Congress: Wave Of Excitement Over 3G
Carlo Longino
TheFeature
Cannes, France
Monday February 23 2004
thefeature.com
It's clear, here on the first day of the 3GSM World Congress, that the industry's got its swagger back. Emboldened by a number of imminent commercial 3G launches, the major players are no longer talking about cost-cutting and survival, and the only storm they're concerned about weathering is the one out in the Med that's sending waves into their beachfront hospitality tents.
Everybody's excited about what should be a pretty fantastic year as the third generation of mobility becomes a reality. Nokia CEO Jorma Olilla and his Vodafone counterpart Arun Sarin shared the stage at Nokia's press conference with the device maker's new 9500 Communicator, which features built-in Wi-Fi and Bluetooth, among other enhancements. But the two CEOs were more interested in talking about the market in general, putting behind them any squabbles about handset branding in favor of a "rising tide lifts all ships" message.
The execs stressed the importance of industry players seeking common ground, working together, and developing common standards and systems for the sake of growing the market in general, with Olilla espousing a "collaborative approach" to "create value for all." Olilla also emphasized another common theme of the day, catering to the enterprise. The 9500 is Nokia's latest device attempt at the business user, and they announced a deal with IBM to create greater links between the computer giant's software and Nokia's mobile devices.
Nokia's segmenting the market into three areas of focus that reflects the company's recent reorganization -- multimedia, enterprise, and voice. This was a theme that ran through several of the day's other presentations as well.
The real meat, though, was in Sarin's appearance, which seemed to gloss over comments out of the carrier last year that it was looking to decrease its dependence on Nokia handsets, and increase its use of carrier-branded devices, with the two companies saying that they were working together to deliver Nokia 3G handsets for the Vodafone Live! service. Sarin danced around the topic during the Q&A, saying, "We have to work together to make things happen," and saying that European manufacturers, in addition to Asian carriers, were "coming on strong" in the 3G handset market. But the obvious inference was that the two companies realized they had more to lose by playing hardball with each other over their brands, and stand to both benefit by delivering handsets from the world's biggest vendor to one of its biggest carriers.
Symbian CEO David Levin had a lot of great news to share, though it was overshadowed by an explanation of Nokia's recent announcement that it was buying Psion out of the OS venture. He seemed keen to dispel the idea that Nokia would have its hands in the day-to-day operations of Symbian, adding that the structure of the company dictates that someone must own 70% of its shares to truly control it, while Nokia's stake would come in somewhere between 46.6 percent and 63.3 percent, depending on the number of shares Symbian's other owners decide to buy with some pre-emptive rights they have with the deal. The company's CFO said that the buyout process could extend until about May or June, with the deal dependent on regulatory reviews in three countries and Psion shareholder approval.
Symbian released solid 2003 results earlier in the day, with the company taking advantage of the growing smartphone market and the growing shift of importance to software. Levin also announced the company's UIQ user-interface unit was releasing version 3.0 of its software, featuring both a two-hand, pen-based and a one-handed, more typical smartphone, version. Symbian also added growing South Korean vendor LG as a licensee, as well as Taiwan's number-two mobile manufacturer, Arima.
Motorola and Siemens made presentations later in the day, and with both companies' positions in the fixed-line market, it wasn't surprising that they were pushing wireless and wireline network convergence. Motorola's CEO Ed Zander shared a vision of "seamless mobility," with a single device working as a PBX phone on an in-building wireless network, then seamlessly transferring to a cellular network, then passing off from the handset to an in-car handsfree system. We know he's only been on the job for a couple of months, but his hopes for the future were a little underwhelming, and frankly, stale.
The company quickle glossed over the most interesting news it had to offer, its new handsets. The company enjoyed something of a renaissance in 2003, making up some ground on the market, and is looking to get a further boost in 2004. It showed off the MPx-300 Pocket PC handset, with a unique dual-hinge device, the A1000 Symbian/UIQ 3G phone, the E1000, one of the first UMTS devices to be packaged in a form factor more typical of a 2G device. It also showed a new GSM push-to-talk handset, as well as the MPx-100 device, which sports a 1.2 megapixel camera.
The company was also pushing the HSDPA demo it's got running in its exhibition booth, and they're very proud of the fact that they can download Shakespeare's entire works in 20 seconds, and a CD in under 12. Call me cynical, but I can't do that on my home wired broadband connection, so I'm not optimistic I'll be seeing that on my mobile too soon -- nevermind the fact that 3G's barely launched.
Siemens echoed Nokia's open-systems approach, saying the simplicity they provide is necessary to grow the market. They also echoed Moto's convergence theme, both on a network level, and on a device level -- with a fixed-line phone that can receive MMS messages. Siemens is also aiming half its handset portfolio at emerging markets, looking to build on its relative strengths in the areas. But Siemens' lack of new 3G-related announcements was a surprise, and while they were glad to tout that 9 of 15 network launches use their equipment, they said their U15 model which they announced last fall would carry them through as their UMTS handset offering to the end of 2004. <<
>> 3GSM World Congress: Operators Take A Second Bite At The Apple
Carlo Longino
TheFeature
Cannes, France
Tuesday February 24, 2004
thefeature.com
CEOs from two of the world's major operators told the crowd at 3GSM this morning that open standards and interoperability are key to the growth of the mobile market. Walled gardens are out, they say, and giving customers the widest possible choice of products and services is the way forward.
Arun Sarin of Vodafone and Rene Obermann of T-Mobile gave a vision for the industry that indicates they've definitely learned lessons since the first iteration of mobile content services over WAP a few years ago. They're insisting that interconnected networks built on common standards with intrinsic interoperability must be implemented for 3G to be a success.
"The challenge that we have in front of us is to make some of these new products and services that we've been talking about for three years come alive," Sarin said. "For our customers to be on the best network, the networks need to all be connected. We have to do it with standards so all our customers have a standard experience."
Too many products and services have been lost in a morass of overly technical and needlessly complex interfaces, Obermann added. "In many respects, this industry has left its customers behind with a lot of technocratic jargon and applications that are too complex to use. We, as an industry, need to focus on making things more usable and more user-friendly."
It's quite a philosophic shift from when carriers introduced WAP behind a boatload of acronyms, confusing setup and logins, and ungainly interfaces. Portals like T-Zones and Vodafone Live! have made certainly made things easier, but the way the execs are talking, it's just the first step.
But as the carriers have learned from their previous missteps, they're saying that the device vendors are playing the same tune as when WAP and GPRS launched: the networks are ready, but there aren't enough handsets yet available, both in range and in number. Both T-Mobile and Vodafone have live 3G networks in Europe, but neither has yet done a mass commercial launch with consumer handsets. Both CEOs said they expect to launch their 3G services with consumer handsets towards the end of the year.
Sarin also talked about Vodafone's recent unsuccessful flirtation with AT&T Wireless, saying that the company simply didn't want to pay as high a price for the carrier as Cingular. He said AT&T was a "strategic asset, but even the most strategic assets have a price, and you have to be disciplined about the price." He said French carrier SFR, which Vodafone owns along with Vivendi, remains a target, and the carrier is also looking to bulk up in Eastern Europe.
But Sarin reinforced that the carriers have moved on from their mistakes of several years ago. "If you look at our industry in the last 3 or 4 years, the big disconnect was what we were saying to the world,and between what we were saying we'd deliver and the lack of what we delievered," he said. "Our rhetoric was a few years ahead of our ability to deliver." <<
>> 3GSM World Congress: Whither 3G?
Carlo Longino
TheFeature
Cannes, France
Wednesday February 25, 2004
thefeature.com
People at the show are saying this is the year for 3G in Europe, but, in a sense, you'd never know.
Nearly every network equipment vendor and mobile operator have been touting the recent and immenent widespread launches of 3G networks in Europe and beyond. While undoubtedly 2004 will (finally) see the spread of third-generation networks and services, is the industry buying into its own hype yet again? There's precious little in the way of 3G handset launches or meaningful 3G product demonstrations.
A couple of carriers have signs around Cannes announcing they're running 3G networks during the show, but there aren't many signs that they're ready to release any compelling applications to drive usage. Orange was showing off a novel video-chat system where a PC user with a webcam can make a video call to a 3G user, and vice versa, in a chat program with a familiar IM-like interface. It's a great answer to the "fax machine" paradigm -- somebody had to have the first fax machine, but until there was a big enough pool of fax machines out in the wild, that first machine was pretty useless. Now, somebody with a 3G phone can immediately extend their videophone circle to their PC-using friends. We couldn't find out if the Orange app could be made compatible with the video chat features of existing PC IM platforms like MSN Messenger or AIM, but that would make it even better.
NTT DoCoMo, as usual, was showing off its impressive FOMA devices and services. The great thing about DoCoMo is that the company's been showing off the same applications for a few years now, but it's so far ahead of European carriers, it doesn't matter. In terms of services and applications, DoCoMo's still the stick by which the Euro carriers are measured.
We've written before about how important the choice of handsets available to consumers has been for DoCoMo and the other Japanese carriers. DoCoMo recently released its latest series of FOMA handsets, and not too surprisingly, they're awesome. They're small and light, have amazingly bright and clear screens, megapixel cameras, and other impressive specs. While the UI doesn't seem as polished as some of the European efforts, these phones are the current gold standard for 3G terminals.
Compare this to the offerings from the non-Asian manufacturers -- if you can find them, that is. Perhaps the vendors are waiting for next month's much more gadget-centric CeBIT show, but only Motorola has announced new UMTS handsets at the show, two devices that won't be available until much later in the year. Nokia's new Communicator was their sole announcement, and a Siemens boss even went so far as to say they won't be offering any new 3G handsets until the turn of the year.
We told you yesterday about how the CEOs of T-Mobile and Vodafone both complained of a distinct lack of suitable 3G handsets, saying they need a wide range of devices being produced in mass-market quantities before they can go to market. The few devices thus far offered by non-Asian manufacturers have been bulky efforts with less than inspiring looks and forms.
While the lack of handsets certainly hampers carriers' plans for commercial launches (and gives an opening to Asian device makers), it doesn't relieve carriers from showing off the applications and services they've got in mind for when they do take their networks to the public. That's another benefit of the data card-only launches we're seeing from the likes of Vodafone: all you're selling is a simple data pipe with a net connection. No apps, not even voice.
But for the carriers' 3G investments to pay off, and this is no surprise to them, they've got to engage their non-business customers with compelling applications and services that they'll spend their money on. A search for concrete examples of any of their ideas for these services has proved pretty fruitless, which is a bit worrying. 3's subscriber figures may leave them open to some ridicule, but at least they set their stall out early with the applications they had in mind for their launch, video calls and football highlights.
The novelty of video calls will quickly wear off, and users will need other services to change their usage patterns away from current voice and SMS-based habits to something else, essentially something that will lead them to use more packets, and spend more money. But what will those be? The carriers don't appear to yet know.
These 3G launches are beginning to look like the proverbial tree falling in the forest. If a 3G network launches without any decent services, will anybody care?
>> Weekly Wrap: 3GSM Comes To a Close
Carlo Longino
TheFeature
Cannes, France
Friday February 27 2004
The 3GSM World Congress ended Thursday, and now there's finally a chance to catch our breath and put things in some perspective.
It's been a busy week, not just for us, but for everybody in the industry at Cannes. Keynotes, panels, meetings, press conferences -- they all add up. While of course there's plenty of socializing going on, a lot of business goes on at 3GSM too. It's easy to blow the show off as the mobile business just going for a week-long holiday in a posh South of France resort, what with the yachts, and the beach, and the fancy hotels, but that's just a backdrop to the real action going on inside a convention center that's not different from any other, anywhere else in the world.
The optimism coming from the industry was almost overwhelming. Fueled by the global economic recovery and given a boost by a monster fourth quarter for handset sales last year, carriers and vendors alike are excited about this year's prospects, particularly 3G network launches. It's hard to know exactly what to take from their unbridled optimism, though, as their hype has burned so many people before, but it's hard to share at least some of their feelings. This is undoubtedly an interesting and exciting time in the industry.
There were a lot of really cool things to see at the show, and there were some that weren't so cool. Let's take a look at some of the highlights and the lowlights.
Two companies that got arguably the biggest boost at the show were Vodafone and Nokia. Vodafone got a little bruised in the AT&T Wireless auction, and with CEO Arun Sarin leading the way, the carrier was out to save some face. Sarin deftly negotiated a press conference with Nokia CEO Jorma Olilla, and a keynote the next morning alongside T-Mobile's CEO, dealing with the buyout failure and another touchy subject, comments out of the carrier last year that it wanted to move away from branded handsets in favor of devices with its own mark. Nokia's launch of its 9500 Communicator handset was probably the biggest story of the week, with some saavy media relations skills getting the device on the front page of major newspapers Monday morning.
Several cool products caught our eye during the show. A company called Jamanda showed off a Symbian Series 60 device security client, putting firewall, anti-virus, spam-blocking and security applications in the handset. While mobile viruses haven't been too much of a problem yet, it's not hard to imagine a simple trojan-like piece of software that gets loaded onto a phone and serruptitiously goes onto the Web to load some sketchy code or makes calls to a premium-rate line. Jamanda's software fights a problem that's really not yet reared its head, but may be the type of application that worried CTOs are looking for.
Openwave was excited to talk about some new software it had developed for MSN, allowing users of its phones to access MSN Messenger, Hotmail, and other services. Openwave's mobile browser captures a large share of the market, particularly in non-smartphone handsets, and its platform also includes messaging and other software. The solution it's crafted for MSN is a powerful and novel pice of software that packs some rich services in a friendly UI.
We also dug some real-time sports trackers from Dutch developer Icemobile. They allow users to follow a football match, a Formula One race, the Olympics or other events live, updating every 15 to 30 seconds with the latest action. The football tracker, for instance, updates with goals and cards, and even sends a few still images of goals immediately after they happen. Vodafone's already using the product for European Champions League games. Another nifty product was a product from Musikube for the MS Smartphone platform that recognizes music, goes out onto the Web and brings back not just the artist and title, but an image of the album cover and links to buy the CD or download the ringtone or song.
Mother Nature's performance during the week gets a low score, with overcast and cold conditions the normal situation. Extremely windy conditions sent bug waves crashing onto the beach Monday, endangering the hospitality tents of several companies. Workers scrambled to build seawalls with earth-moving equipment, and alas, all was well. Another black mark goes to the ironic situation regarding Net connectivity at the show, particularly for the press. With the amount of bandwidth flowing into the place, not to mention that it's a telecommunications conference, a dozen wired ethernet ports and a sketchy and ridiculously priced Wi-Fi service (EUR 80 for 3 days) made staying in touch with the outside world -- something supposed to be this industry's bread and butter -- a chore. <<
Off to CeBIT
Carlo Longino
TheFeature
On the Way to a US Airport
March 12, 2004
thefeature.com
I'm leaving soon for Germany, where TheFeature will be on the ground next week at the massive CeBIT show to bring you all the latest news. See you there! <<
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Stay tuned! For those of us invested in wireless, let's hope the optimistic mood of Cannes continues in Hannover and sector sentiment remains bullish headed into Atlanta. Beyond Atlanta we have CQ2 2004 wireless earnings season and it should be positive, offset by possibly signs of some component shortages, which in itself is a positive signal. There may be some shakeout of inflated valuations of the "recovery plays" unless their recovery progress is real rather than imagined. There may also be issues related to currency conversion for European companies accounting in the Euro but selling into markets in USD, because of the strong Euro v. weak Dollar.
- Eric - |
