(OT) Re: Market Growth/Rechargeables
EUROPE-ERICSSON-MOBILECOMMERCE
By Sara Ledwith, European technology correspondent
LONDON, Dec 8 (Reuters) - The prospect of the Internet
bursting into the mass mobile phone market is driving a boom in
European mobile communications stocks, and on Wednesday brought
industry giant Microsoft squarely into the arena.
Microsoft's joint venture with mobile communications leader
Ericsson shook the industry worldwide, bringing
together the computing and market power of the Seattle company
and the wireless communications strength of the Swedish group.
Analysts say it is just one of the first in a series of
alliances which promise to finally free the Internet from the
fixed telephone line and make it as ubiquitous as the mobile
phone.
NO PASSING FAD
Despite all the hyperbole surrounding the Internet, and
prospects for mobile Internet access through European-led
technology, analysts say it was no passing fad when Ericsson's
Finnish rival Nokia overtook BP Amoco in share market
value earlier this week.
With the rise of Nokia, a Finnish rubber-boot maker turned
global mobile phone leader, technology in Europe is worth more
than oil.
The Internet fever that has driven the United States is
taking off in Europe, but a key difference underpinning high
prices for some tech stocks is the prospect of accessing the Net on a mobile
phone, which should open up a true mass market.
"You are looking at a situation which could potentially be
more explosive (than in the U.S.)," said Michael Browne, head of European
equity at Chase Asset Management.
By hooking up to the Internet through their wireless
devices, consumers will be able to pay bills directly through
the cellphone, send instant silent messages and e-mails, and
more.
According to researchers at specialist brokerage Durlacher,
the annual market for mobile electronic commerce could be worth
23 billion euros ($23.56 billion) by 2003, from about 300
million in 1998.
"Mobile Internet is now becoming a reality," said Falk
Muller-Veerse, Durlacher's manager of European research. It is
already possible to surf on a wire-free handset, but in future,
people may be using the Net on cellphones without knowing it.
BEHIND ON INTERNET, AHEAD IN MOBILES
Besides Nokia, shares in Ericsson and Psion
are already pregnant with Internet hopes. Motorola
, Siemens and Lucent are also big in
mobile phone infrastructure.
Nokia and Psion shares were both jolted by the news of the
Microsoft, Ericsson alliance only to recover much of their
losses in the belief that data mobility will benefit them all.
Mobility adds a unique flavour to the Internet investment
potential in European markets.
While Europe is behind the United States in Internet use,
and major European Internet firms are starting to float only
around now, it is ahead in mobile phones.
That lead has been encouraged by the fact that unlike the
United States, Europe has one standard cellphone technology,
which has created enough of a single market to make it viable to develop
more sophisticated products.
Mobile phones are more popular than personal computers.
About twice as many mobile phones are sold now as personal
computers, and in countries like Britain, Germany and Italy
mobile subscribers far outnumber existing Internet users.
Many wireless phone users in Europe already send text
messages as well as chatting -- for instance, last month in
Germany a total of 400 million messages were sent.
Building on this, in coming months another technology phase
-- Wireless Application Protocol or WAP -- will form a simple,
user-friendly way to handle complicated information on a mobile.
MOBILE INTERNET UNTESTED MARKET
The market is untested and many potential services have yet
to emerge, but bankers particularly see clear potential in, for
instance, trading stocks or even paying for day-to-day goods
through a secure, simple cellphone transaction.
"The big pusher service will be the opportunity to make
secure payments at a store," said Gert Engman, executive
vice-president for on-line services at Swedbank ,
which aims its fledgling mobile services at 18-25 year olds.
Alan Torry, technology fund manager at SG Asset Management,
said he sees strong potential in the scope for the new
technology to detach the Internet experience from the dull PC
into a myriad of other, possibly dedicated devices.
DIGGING FOR WINNERS
The obvious potential technology winners start with mobile
equipment makers, because WAP phones are a generation up from
those now available, and WAP is just the first technological
step in a wave of network upgrades from which they can benefit.
But also high up are the mobile network operators -- the
companies which will provide the services and use the complex
customer knowledge they have built to add value.
The takeover fight between Vodafone AirTouch and
Mannesmann is one example of a scramble for market
reach -- and analysts say the consolidation here is set to
continue, fuelling speculative stock gains.
Analysts at HSBC recently identified existing potential
winners from the full-blown, third-generation era of wireless
data, heading up the list with Nordics like Sonera ,
Telia/Telenor and Netcom , but also awarding high
marks to Belgium's Belgacom [BGC.CN] and Mobistar and to France
Telecom and Cegetel .
"Until now mobile operators have simply not experienced an
Internet-type valuation, but I think they can move towards that
direction," said Durlacher's Muller-Veerse.
Inside the phone itself, European makers of components that
have already claimed a strong position include Philips ,
STMicroelectronics and Siemens .
Durlacher's analysis also picks out other players. In the
market to put software on mobile phones there is a battle at the operating
system level between the mobile leaders and Microsoft,
while another U.S. firm, Phone.com leads the field for
the microbrowsers that phones could use.
Besides well-known names to put content on the new phones --
groups like Yahoo! or Excite -- Durlacher also highlights
online brokerage Consors , French-based
traffic news company Webraska, information group Reuters
and stock exchange information provider Multichart.
Security systems will also be key and further into the
future, Durlacher adds, mobile advertising, payment systems and
other business uses could offer rich pickings.
((tel +44 20 7542 6437, e-mail sara.ledwith@reuters.com))
($1=.9761 Euro)
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