800lb Reindeer's, Qualcomm, 3G, PNG's (a Bluetooth PAN), 4G, etc. ...
I'm not exactly sure where 800lb Reindeer fit in Moore's Pantheon but the man who takes liberal shots at The Beast (from Redmond) and coined the terms Qualcomm Headbangers, Qualcomm's Barmy Army, and Qualcomm's Nutball Fringe applies the term here to King Nokia.
Qualcomm fans may find the article interesting since it discusses phones based on the MSM6300 that will be used by the two "Vees" (Vodafone & Verizon)
>> Carriers Conspire to Cage 800lb Reindeer
Andrew Orlowski in San Francisco
TheRegister
15/03/2003
The political power struggle between the cellular networks and the handset manufacturers continues to get ever more fiendishly complicated.
As if it wasn't complicated enough to begin with. Ericsson, Nokia and Siemens all supply back-end infrastructure to the carriers too, so it's always been a tangled, symbiotic arrangement. More recently, with the carriers dead broke, Nokia has emerged as the 800lb reindeer, by virtue of the fact that it's the only vendor actually making money. Now comes the push back.
(Moto's phone division is back in the black; and Qualcomm's making money, too, but not the big league billions that Nokia turns over, and isn't a player in Europe or a significant force in Asia outside Korea.)
As we noted in our 3GSM World Congress reports last month, all the big terminal manufacturers Nokia, Siemens, Motorola, SonyEricsson and Samsung were all practicising their Dickens' Uriah Heep cameos: anxious to show themselves as 'umble, very 'umble before their carrier customers.
Gone are the days when the handset manufacturers could roll into town with roadmaps, throw a party, and then bugger off. That worked when the networks had dot.com style valuations, and the market was growing, and everyone was happy.
Now the Wall Street Journal reports that Vodafone, which has spent millions on launching its branded Vodafone Live service with apparently early success, is to expand the venture in partnership with the US carrier Verizon, in which it owns a 45 per cent stake. Vodafone has also signed up Samsung to the kind of exclusive deal that it struck with Sharp for the launch of the Live service in Europe.
"Vodafone and Verizon Wireless have asked Samsung to develop a handset that works on both their networks so their customers can use the same phones and services in the U.S. and Europe," reports the WSJ.
The two Vees don't have compatible networks, with Verizon in the US running CDMA, and Vodafone in Europe running GSM/GPRS, so the handsets will need to be compatible with both air interfaces, which makes them more expensive. Nor will they be compatible in the future, unless Verizon throws a wobbler with Qualcomm - as has been hinted ever since Vodafone took a stake in the creation of Verizon - and joins the W-CDMA crowd. But that day looks a long way off.
But what the Vees will create, effectively, is a transatlantic phone "brand" that threatens to devalue the Nokia and SonyEricsson brands. More urgently, for the future, it threatens to pull leadership away from Espoo and Stockholm by creating a "platform". In a sense this pulls all the prospective "platform" providers - including Sun, Microsoft and Palm - onto common ground.
Nokia is the clear leader in this. All of a sudden, Series 60/Symbian phones are everywhere - Samsung, Panasonic, Sendo, and Siemens have all signed up. Series 60 gives you the guts of a Nokia smartphone. The packaging - the hardware wrapper - is up to the licensee.
So what kind of world will be looking at in the future? Will phones be an open platform running Series 60, or UIQ, or both and Java - basically APIs promoted by handset providers - or will they be a model that more closely resembles the US cable industry? Will it be more like software, or a service model?
Software or Service?
The cable analogy is interesting. The TV set manufacturers don't get to choose what you view on your cable package. The cable providers are gatekeepers to the content, and the TV standards are old, and the products are commodities.
This is certainly a route the networks want to follow, but they might encounter three conditions that make for a bumpy ride.
Firstly, the Vees - and prospective Vees - don't have the grip on overwhelmingly compelling content. There's no HBO for phones yet. There's no "Sopranos". There's even a school of thought - aired often here at The Register, that there never will be, either. Phones will be communications devices and we'll create and view our own content, thanks all the same, with picture messaging, mobile weblogging and chat. Carriers will enhance all three with location-aware versions, but the model will be the same: we'll still be creating our own content.
Secondly, and this is another old favorite, the phone model will resist commodification for the foreseeable future.
Thirdly, and Danger's Andy Rubin remarked on this in a recent panel here, mobile data devices will come in all shapes and sizes, rather than phone-shaped er, ... phones.. Guy Kewney's roundup (article linked below) of PMG's is a must read. It deserves an analysis in its own right, probably tomorrow, but you can see how the device manufacturers have an ace up their sleeve. Siemens' PMG-phone will be able to use your land-line connection when you're within range of the Bluetooth gateway, and switch to GSM/GPRS when you wander outdoors. I can already surf from bed at DSL speeds on my P800, thanks to Bluetooth, but PMGs promise a future of terrifically disruptive new technologies.
And device manufacturers Nokia and Sony, who are consistently cited as two of the Top Ten brands in the world, and are not likely to relinquish this position without a fight. <<
Links to two embedded links from the above article:
Guy Kewney's Suddenly, The Personal Phone Hub is Respectable, which discusses samsung, Motorola, and Personal Mobile Gateways (PMG), a Bluetooth PAN:
Message 18704485
The Andrew Odlyzko: Home Page
dtc.umn.edu
... and here is Andrew in San Francisco discussing that other Andrew (Odlyzko) and 4G a few years back:
>> Talking Back To Happiness - How Voice Calls Can Save 3G
Andrew Orlowski in San Francisco
26/04/2001
Europe's 3G disaster could be mitigated by getting phone users to spend a little longer each day on the phone talking. That's the opinion of AT&T Labs researcher says Andrew Odlyzko, author of the justifiably celebrated research paper Content Is Not King.
Odlyzko's proposition is simple: historically more money has been spent on point to point communications and connectivity than on content, which in digital terms means email, instant messaging and chat groups, and peer-to-peer personal file sharing. Networks looking to recoup the data services to recoup the costs of 3G licenses are whistling, he says.
"3G is a wonderful technology - but there's no business case for it," he says bluntly.
Research firm Jupiter MMXI predicted this week that mobile data revenues would race to 8.1 billion euros ($11 billion) by 2005. Odlyzko doesn't dispute the projection, but points out that in the scheme of things it's an insignificant sum:-
"If that's all they're going to get, they're going to face financial ruin," he told us this week. The cost of 3G licenses and infrastructure will top $200 billion, and the E8 billion data business that Jupiter sees will be dwarfed by E124 billion worth of voice calls.
"Content Is Not King" was updated recently and it looks as fresh as a daisy. It's a very readable fly-through technology hypes of the past century. And it's particularly pertinent in light of the WAP flop, and the parallel explosion of SMS text messaging. SMS flew, despite being tricky to use because of the immediate communication benefits. WAP and mobile data services have a historical antecedent in the form of the Telefon Hirmondo service in Budapest, notes Odlyzko, one of several attempts to use the newly-invented telephone for delivering content. It lasted until after the end of World War One, by which time subscribers were prepared to pay eight times as much for connectivity as for content.
The Answer: Talk More?
4G might solve the problem, believes Odlyzko, but in the mean time all is not lost. There's evidence he suggests of data services inducing users to use their phones for more or longer voice calls.
The amount spent by the average British mobile phone user each day might surprise you. It astonished us. A straw poll in the office produced responses ranging from 30 minutes to an hour. In fact, according to OFTEL, it's around 3 minutes and falling.
"Quadrupling the time spent talking would cover the costs of the 3G infrastructure and licenses. It sounds a lot, but 12 minutes on the phone each day isn't that much," he tells us. Networks smart enough to view data as a loss leader will eventually recoup their costs from voice calls.
Anyone Listening
However the networks don't appear to be listening, and continue to insist that mobile data services will buck the historical trend and become significant revenue earners in their own right.
Odlyzko was particularly appalled by our suggestion that that the European networks are likely to make consumers pay for data by the packet, while businesses get all-you-can-eat flat rate tariffs:
"This is just backwards - totally backwards! Businesses should pay for more of the infrastructure - two thirds of wireline revenues are from business," he points out. Imaginative calling plans, such as the US model of buying monthly blocks of airtime, can increase usage and the all important ARPU (average revenue per user). However the US cellular business has its own problems: callers pay for each incoming calls -unthinkable in Europe - an indirect result of cellular numbers having the same dialing codes as landline numbers. Other inducements such as US-style 1-800 numbers and call back services, could fuel usage.
That's going to require not only a sudden attack of corporate clear headedness, and even long-term planning, but stranger things have happened...
Andrew's paper is one of several intriguing studies on his webpage, where you can find direct links to the paper in HTML, PDF and Postscript versions there too. (see link above this article) ® <<
- Eric - |
