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Technology Stocks : InfoSpace (INSP): Where GNET went! -- Ignore unavailable to you. Want to Upgrade?

To: KLP who wrote (26859)	3/20/2002 9:33:13 PM
From: Roger Sherman	Read Replies (1) \| Respond to of 28311

A threat to INSP's "wireless" business model? The article below came out in today's Seattle Times. It was apparently written at the current CTIA (Cellular Telecommunications and Internet Association) 2002 trade show in Orlando, Florida. Don't know if INSP is involved in the conference or not, but it sure seems that they should be there. I believe that AT&T is supposedly still a "partner" with INSP. AT&T's new mMode could be an opportunity for INSP, however it sure seems to me that it could also pose a major potential threat to a puny little company like INSP, and their entire "wireless" business strategy. Time will tell, I guess. seattletimes.nwsource.com Wednesday, March 20, 2002, 12:00 a.m. Pacific CTIA 2002: AT&T Wireless to offer Internet via telephones By Sharon Pian Chan Seattle Times technology reporter ORLANDO, Fla. -- More than a year after Japanese wireless giant NTT DoCoMo invested $10 billion in AT&T Wireless, the Redmond carrier plans to bring its own version of DoCoMo's wildly popular i-mode wireless Internet service to the U.S. beginning next month. The service, to be called mMode, is targeted at customers 18 to 34 and will enable them to use a wireless phone to handle e-mail, instant messaging, synchronization with calendar and contact information, and Web browsing. Monthly plans range from $2.99 for basic service up to $12.99 for more capacity. Premium content will come from independent content developers. AT&T Wireless, outlining its plans at the annual Cellular Telecommunications and Internet Association trade show, hopes to reproduce the success of i-mode in Japan, which now has 31 million subscribers who download special ring tones, view photos and play games on their phone. The number is striking, given that AT&T Wireless' total subscriber count is 18 million. One key to i-mode's success is thought to be its approach of making it simple for independent software developers to create applications for the platform and make money. "One of the biggest challenges right now with wireless data is that nobody wants to bring content because it's not clear how they're going to make money," said Andre Dehan, executive vice president at AT&T Wireless and president of the mobile multimedia subsidiary. As with DoCoMo's model, revenue generated from mMode premium content will be split between the developers and AT&T Wireless, with roughly 91 percent going to the developers. AT&T Wireless will handle billing on behalf of the developers. The company says it already has 145 content developers making 200 applications and expects to recruit more than 1,000 developers to its platform by the end of the year. MMode runs on the company's new higher-speed wireless-data network, which transfers data at about the same speed as a dial-up modem. That network covers about 45 percent of AT&T Wireless' system, but the company expects to cover its entire voice network by the end of next year. Extensive coverage is crucial. The lack of it was one reason AT&T Wireless' first wireless Internet service, PocketNet, failed to attract many subscribers. PocketNet was also a so-called "walled garden," an America Online-type system in which AT&T Wireless provided all content, and it was difficult to retrieve information on the Internet. "They need to be careful that they have the network built out; otherwise, the service will be tainted," said Keith Mallinson, analyst with the Yankee Group, a market-research company. "The i-mode model gives us confidence that there is an opportunity but it's unclear whether it will get the traction it did in Japan," he said. PocketNet also failed because of the lack of compelling devices; most had small monochromatic screens that could display only a few lines of text. "These do not look like PocketNet phones," said Dehan, holding up a color-screen phone. Initially, the service will be available on four devices, but the company expects to have more than a dozen that support mMode by the end of the year. The services are being developed by the mobile multimedia subsidiary at AT&T Wireless, which has 300 employees. The subsidiary is expected to grow to between 500 and 600 employees by the end of the year. The subsidiary is also developing services that will allow users to send instant messages and know when other selected users are online. That application is expected to be available in June. Separately, the company discussed the prices it would charge users to access data over its wireless data network from laptops and personal digital assistants. Transferring data over a PDA will start at $39.99 a month for 10 megabytes of data and $59.99 a month for 20 megabytes of data on a laptop. The company has yet to work out details for access with multiple devices on a single network. Dehan said "it's too early" to launch an unlimited data-rate plan. "We don't have a good sense of the market," Dehan said. Sharon Pian Chan can be reached at 206-464-2958 or schan@seattletimes.com. Copyright © 2002 The Seattle Times Company