The US mobile wireless scene from Ericsson's perspective
>> AMERICANS ARE BECOMING INCREASINGLY MOBILE
ericsson.com
[First published in Contact, 16 May 2000]
With the launch of a host of new products, the year 2000 is expected to be Ericsson's breakthrough year in the US for mobile phones.
Before the end of the year, over 130 million North Americans will use a cellular phone. These days, what is attracting them more than anything else is the possibility of wireless data communications. WAP fever is now spreading across the American continent at breakneck speed.
Until a couple of years ago, using a cellular phone in the US was a costly proposition. It was significantly more expensive than in Europe. Today the situation is just the opposite. Fixed rates and prepaid subscriptions have made cell phones accessible to the average American. With fixed rates, a call costs the same no matter where you are calling from.
Previously the person who received a call on a mobile phone had to pay for the call. This resulted in many mobile phone users who simply didn't want to risk leaving their phones on, since they would never know how much it would cost. Today, several operators offer rates that include the first minute of incoming calls for free.
Fixed Rates Increase Sales
A year and a half ago, two of the country's biggest national operators, Sprint and AT&T, offered new rate schemes with fixed prices. These measures, coupled with a recently implemented system for prepaid subscriptions, have sparked cell phone sales in the US.
Several of the country's other operators, such as Southwestern Bell, BellSouth and Voicestream have followed suit, in order to keep up with the competition.
Ericsson was the first company to produce telephones for prepaid subscriptions for AT&T and currently the company is also the biggest supplier to BellSouth.
As early as the mid 1990s, prepaid subscriptions were used as a marketing tool in Latin America, especially in Mexico and Venezuela. Ericsson delivered the first telephones for those markets in 1996. The restrictive approach to cell phone usage by Americans has changed, with increasing numbers of people realizing the benefits of being able to communicate and the ability to be reached. "Penetration, or the percentage of the population using cellular phones, is now growing rapidly in North America. There was an increase from 30 percent in 1999 to 40 percent this year," says H†kan Wretsell, Ericsson Mobile Phones Region Americas.
"WAP fever and the high Internet penetration rate mean that new products Ericsson is now introducing in the US are already adapted for Internet access. Telephone sales will be heavy, and from now on an increasingly large share of people will have their first contact with the Internet through a mobile phone."
First quarter successful
Currently, four different cellular phone systems are being used in the US. The analog system, or AMPS, is the largest by volume, but is increasingly being replaced by GSM, CDMA and TDMA.
By the end of the year, CDMA technology will have surpassed TDMA, since more operators have chosen that particular technology. However, over time, these systems are expected to grow at roughly the same rate. "In a couple of years, we'll have new technology that will, in principle, allow a single telephone to handle several different standards. Then you'll be able to move around the world and always have access to mobile communications," says H†kan Wretsell.
In terms of volume and production, Ericsson Mobile Phones in the US lost ground during 1998. However, that setback has now been overcome by the company. The first quarter of 2000 was also a successful one in terms of sales and marketing for Ericsson Mobile Phones Region Americas. "The comparison between our market share growth and sales volume this year compared with the same period last year is very good. The entire American organization has worked hard to achieve this turnaround," says H†kan Wretsell. "Customers have regained their confidence in Ericsson as one of the market leaders in North America," Wretsell adds.
During 2000, a number of new products will be rolled out. For the GSM standard, the T28 World phone will be launched. Also arriving will be the A1228c, Ericsson's first CDMA mobile phone. For the TDMA standard, Ericsson will be offering the A1228d and the smaller T18d.
The phones that H†kan Wretsell and his colleagues in Miami predict will revolutionize mobile phone usage in the US are the wireless Internet mobile phones ? the A1228c for CDMA and R280 LX for TDMA (CDPD). The R280 LX is Ericsson's first phone with wireless Internet access and started shipping during April.
A WAP phone for the people
AT&T is now getting into the game together with Ericsson, and will be launching a new service package during the second quarter of this year for its new wireless Internet mobile phones. "AT&T is now investing millions of dollars in a marketing campaign across North America for the new datacom telephone. It will have a decidedly mass-market appeal or, in other words, will be a WAP phone for the people," says H†kan Wretsell.
AT&T is also planning to launch a prepaid package for wireless Internet, but a date has not yet been set. But are Americans ready for the new datacom technology? "Of course," he says. "Mobile telephony is all about peoples' lives. It has to do with communication between people. Soon, having access to information about the weather, the stock market or sports results, regardless of where you are, will seem just as natural as talking on a mobile phone. That's something which is highly appealing to Americans."
H†kan Wretsell is convinced that developments within wireless datacom will explode in the US in the near future, and that the explosion will be very powerful.
WIRELESS USAGE IN FIGURES
Percentage of North America's population that owns a mobile phone:
1997: approximately 20 percent
1998: 25 percent
1999: 30 percent
2000: 40 percent.
Number of telephones sold in North America, total for the entire market:
1997: 23 million
1998: 34 million
1999: 53 million
2000: 76 million
These figures include all manufacturers. <<
- Eric - |
