"The telecom industry is a bunch of old dinosaurs with no creativity,"
This can't be right, can It? Also, what does a $10 CDMA phone mean to QCOM?
"The four major global standards – GSM, TDMA, CDMA and analog. -- paper-wrapped mobile phone. The price? Ten dollars for 60 minutes of talk"
From IBD
investors.com
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Start-Up To Ring In The Disposable Cell Phone Era
By Peter Benesh
Investor's Business Daily
It was worse than a bad hair day. It was a bad cell-phone day. Randi Altschul, a toy and game creator in Cliffside Park, N.J., couldn't keep a conversation going.
"I was driving in my car and talking on my cell phone, which I should not have been doing, and I kept losing the signal," Altschul recalled. "It drove me nuts. I wanted to throw the damn thing out the window."
That's when the light went on. What the world needs, she decided, was a disposable cell phone.
Now Altschul's company, Dieceland Technology Corp., is about to launch the world's first paper-wrapped mobile phone. The price? Ten dollars for 60 minutes of talk.
She calls it the Phone-Card-Phone. Analysts are intrigued.
Altschul, 40, has poured $2 million of her own money into the project. She's in talks about an initial public offering.
The company has working models of the phones, Altschul says. Samples will be ready in May.
"We've already got 100 million units projected just for the U.S.," she said. "Worldwide, we're looking at more than 300 million units. It's terrifying."
The promise of big sales enticed battery maker Duracell to get on board. The company contracted with Dieceland to supply a new battery called the 4A.
While the phones will be disposable, Altschul thinks some people will keep them.
"We can illustrate these things with anything," she said. "Maybe the Elvis phone, the Disney phone, whatever."
She believes people will make the expired phones collectibles, as happened with prepaid phone cards in the U.S. and Europe.
But if the batteries were internal, they might leak, and no one would keep them. So her company designed an external pack for the Duracell batteries. Collectors can remove the batteries and keep the expired phone.
She says the phones will be made to support the four major global standards – GSM, TDMA, CDMA and analog. Negotiations with carriers around the world are close to complete, she says.
"You'll literally be able to pick up the phone at Kennedy Airport and go to London and find it still works," Altschul said.
Daniel Berninger, managing director of wireless research firm Pulver.com in Melville, N.Y., says Altschul is tapping a ready market. "People will do pretty much anything to save money and for convenience," he said.
The cellular industry has missed this concept, he says. "It's spent a lot of time trying to serve the business user. But the innovative stuff is more targeted at the consumer," Berninger said. Altschul's brainchild is "one of those things that appears not to be possible until somebody does it."
Berninger predicts that the Phone-Card-Phone will find new markets. "They should be included in all rental cars," he said.
Peter O'Kelly, analyst with wireless research company Patricia Seybold Group of Boston, calls the throwaway phone a great idea. He sees parallels with disposable cameras. Cheap and universal, they are big sellers worldwide.
He sees the phones as a hit for people who need to make emergency calls on the road. "People who buy conventional cell phones for the car as a safety precaution find they don't use them, and they're paying a steep monthly fee for no reason," he said.
A prepaid disposable phone should find a big market in the world's glove compartments, he says.
He suggests the throwaway phones would make useful promotional items as well. Booths at conventions could hand them out.
Foreign visitors could also be potential customers, O'Kelly says. "Cellular phone services are wildly variable across North America. If you come here as a tourist, your overseas phone won't work here," he said.
Visitors would be happy to find a cheap prepaid phone on sale at the airport, O'Kelly says.
Even the big cell phone companies could find something to like about Altschul's product – although it might at first seem to cut into their business.
"It's counterintuitive, but I can imagine a scenario where handset manufacturers would see this as beneficial," O'Kelly said. "It could get more people addicted to cell phones."
Altschul says she's already been approached by groups that want to buy her company. She's rebuffed them all.
"I'm in it for the long run," she said. "I know what we have, and if I sold out now I would not be living up to its potential."
She has other principles. Altschul, born to immigrant parents, says she will make all of the phones in the U.S. "I have pride in America," she said.
And she intends to keep her firm to a dozen people. "We can move faster and get more done than the biggest conglomerates around," she said.
As for protecting her technology, Altschul says she has 22 patents. "We've got everything covered around the world," she said.
And if a major wireless company offered a partnership? Not interested, she says.
"The telecom industry is a bunch of old dinosaurs with no creativity," said Altschul. "They won't get in on the ground floor and work with you. There's so much NIH syndrome – not invented here – you're never going to find the creative hot stuff inside a big company." |
