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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: foundation who wrote (31942)	1/31/2003 5:53:15 PM
From: foundation	Respond to of 197011

Can MMS be pushed up to the heights of SMS? Jan 31 2003 Last week a column in the consumer press introduced a piece on MMS with the old joke about Alexander Graham Bell's invention of the phone being useless until someone else invented another one. The columnist's point was that until all your friends and family have MMS handsets there's little point in buying one yourself. This is a vital difference between MMS and SMS. Because SMS was part of the original GSM standard, there was already an installed base of handsets when people discovered what it could do. Hence the explosive growth of text messaging. With MMS the rate of growth can only be slower, since it depends on the rate of take-up of handsets, which in turn depends on the technology adoption cycle, as well as such vagaries as consumer confidence. The joke had further resonance in an MMS world where interoperability between networks is only just being put in place. This week has seen O2's announcement of interoperability with Orange and T-Mobile, and industry watchers expect other links to follow shortly. A further layer of relevance was highlighted by Steve Buck, Logica CMG Wireless Networks MMS product marketing manager, in NMA's front page story last week, when he pointed out the need for the industry to ensure handset compatibility above network interoperability. Certainly anyone wanting an illustration of the dangers of incompatible technology need only look to the US, which is only now beginning to properly adopt SMS (see NMA/Wireless, page 35). MMS proponents will say that the technological hurdles are being overcome, and will point to the success of Vodafone Live! in attracting over 380,000 users since launch in October as evidence of consumer enthusiasm for multimedia mobile services. But as these problems are solved they will only reveal even thornier issues for the mobile operators. As we report on page 14, research from Datamonitor suggests that revenue predictions for mobile data are over-optimistic, while SMS revenues will fall as price competition increases and new technologies are introduced. This highlights the pricing problem that industry watchers have been predicting will be key for MMS take-up. For it to drive revenues through increased margins, messages must be priced higher than SMS. But if MMS is to replace at least part of the SMS traffic, it needs to be priced to encourage the same casual usage as SMS currently enjoys. Meanwhile a recent Strand Consulting report suggests MMS is already established in South Korea, but at prices some 80% lower than those being charged in Europe. Until these issues are resolved the significant difference between SMS and MMS is that the former was a 'pull' phenomenon, driven by consumers, whereas the latter continues to be a 'push' initiative, driven by suppliers and operators. Their biggest problem is that, to pay their debts, they need it to behave like SMS. For more information and stories in this area visit the UK's leading new media title at nma.co.uk thefeature.com ========= How do carriers cope with a data delivery technology whose costs and drain on capacity exceed what the market will bear in terms of price for service? Europe is not alone, as China Mobile has reported charging below cost for GPRS. Not surprisingly, Mobile is also reported as not expecting to recoup its 2.5G investment. How can Korea carriers profit charging 80% less? GSM1x anyone? LOL!