Plugged In: Spain's American Revolution
(From BARRON'S)
By Tiernan Ray
This week, some 50,000 people will gather in Barcelona for the annual cellphone ritual called the Mobile World Congress, the biggest show in the industry. But Barcelona has lost some importance thanks to two American interlopers, Apple (ticker: AAPL) and Google (GOOG).
The congress was once the Detroit Auto Show on the Mediterranean, with press, investors and industry execs kicking the tires on lots of different handsets to figure out what's going to sell. In an Apple-Google age, that's no longer so important.
"I used to be able to walk around the show floor, pick up something and say, 'This looks cool,'" remarks Barclays Capital analyst Jeffrey Kvaal. "Now it's just a slab of glass" -- referring to the Apple iPhone and Google Nexus One smartphone look-alikes that he expects to see in droves.
"The funny thing is, it'll be a busy show but a peaceful show. There aren't going to be massive announcements," says Nomura Securities's Richard Windsor. "You could make the argument that it isn't as central as in years past."
Much of the buzz has shifted off the show floor and away from Barcelona. Apple's CEO Steve Jobs remarked last month that Apple is the largest mobile-device maker by revenue, not units, counting its laptops, iPhones and iPods. That boast says much about Apple's ability to set the agenda in wireless, even for cellphone leader Nokia (NOK). (Apple is widely expected to offer a new iPhone model this summer.)
Apple, without any presence in Barcelona, has shifted priorities on an epic scale with its iPhone and the company's focus on software. Nokia has abandoned Spain as the debutante ball for its phones. The Finnish company will have no new models to show off. Most of the talk next week will be about its software, called Symbian/Maemo, and how it will compete with the following the iPhone has amassed, with more than 140,000 applications.
It all points to a larger battle, one which Barcelona will do little to clarify, between software empires. Those include Apple's iPhone operating system, Google's Android, Symbian, and Microsoft's (MSFT) Windows Mobile version seven; some also count BlackBerry maker Research in Motion's (RIMM) OS and Palm's (PALM) Web OS. The Wall Street Journal reports Microsoft will unveil mobile Win 7 on Feb. 15, but the software won't ship till later this year.
Google's CEO Eric Schmidt will be a Barcelona headliner, and one imagines traveling all that way, he'll have something of significance to offer. With the release of the company's own branded Nexus One phone, Google is both a supplier and a competitor to the Barcelona crowd. Taiwan's HTC is Google's preferred ally for the moment, having built the Nexus One. The biggest drama next week may indeed be how HTC and South Korea's Samsung and LG Electronics will explain being handmaids to everyone else's software, without any operating system of their own to shop.
RIM will be there, too, but whether there will be any word about updates to its software is unclear, says Will Power of R.W. Baird, even though software, not the next model of BlackBerry, is most important for RIM's future.
Sure, Spain will continue to be a great place to spend a week planning telecom budgets. But its role as the place where industry trends are decided has been forever diminished by the Americans.
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