All, Galvin of MOT on growth - note 1 billion subs and more than one phone each portion - think cdma market share - do some royalty math
from the Far Eastern Economic Review
Getting the Message
A host of novel uses may spur handset demand
By Charles Bickers in Hong Kong
April 8, 1999
Chris Galvin, the CEO of U.S. electronics and phone maker Motorola,
settles into his chair at the company's Hong Kong offices and spreads an
array of gadgets across the desk. His digital booty includes mostly wireless
phones in sizes ranging from pocket to penknife. Somewhere in the mix,
says Galvin, is a phone for everyone.
In fact, more than one phone. Motorola and other major wireless phone
makers now bank on each user buying two or more, in a market that
industry watchers forecast will grow by 20% a year until 2005. "For the next
10 to 15 years, it's just going to be a great business," says Galvin.
In the near term, he adds, users will want to have one or more mobile
phones for different uses. But within two to five years, a looming explosion
in demand for wireless Internet access will usher in a whole new generation
of communications tools.
Today, about 10% of ordinary voice calls around the world are made using
wireless telephones. Within 10 years, Galvin expects this figure to rise to
around 50%. This will probably happen relatively quickly in Asia, where
many new consumers find it easier to get a wireless connection than a land
line. Nokia, a leading cellphone maker based in Finland, agrees that wireless
phone systems will become as common as line-based ones. The company
expects that by 2005 mobile users worldwide will total 1 billion--slightly
more than the total number of fixed phone lines.
The immediate focus for manufacturers is designing phones for different
uses, even for different times of the day. "We think people will be using a
combination of mobile phones," says Galvin. The handset people use
during their workday, he says, may have a host of advanced
features--offering the performance of an electronic organizer for keeping
track of contacts, phone numbers and schedules, while also allowing
access to e-mail and the Internet. During leisure hours, when users might
only need to make voice calls, they might opt to carry a smaller, lighter
phone that doesn't sport so many options. They would use a single phone
number, though, inserting their individual subscriber identity module--or
SIM--card (issued by a mobile-phone-service provider), into each phone, or
by having multiple SIM cards with the same number.
Making phones smaller is easier than integrating advanced data
capabilities and Internet access. That's why so many tiny phones, often
smaller than a deck of cards and weighing under 150 grams, are already
widely available. Nokia's sleek, metallic 8810 is a good example. This
100-gram silver phone looks like a flashy, undersized electric razor. Its
sliding cover, though, reveals a phone equipped with built-in data
capabilities and the latest technologies for improving call quality.
At a recent technology fair in Hanover, Germany, the three biggest
manufacturers--Motorola, Nokia and Sweden's Ericsson--demonstrated
their latest dual-band models, so called because they will work on both of
the common frequencies in the Global System for Mobile--or
GSM--networks, which are the most widespread in Asia and Europe.
Ericsson showed its tiny T18, which will pack features like voice-activated
dialling and answering and a vibrating alert into a 148-gram frame, and
Nokia its 3210, which has an integral antenna to reduce bulk, weighs 152
grams and will keep working for up to 10 days without recharging. Both
phones will be available in the second quarter of this year. Motorola also
unveiled the world's smallest dual-band GSM phone--its 87-gram v3688,
about the size of a small candy bar.
The v3688 lies on Galvin's desk next to a new triple-band phone, the L7089,
which is also able to access GSM networks in the United States that use a
third frequency. Galvin is confident these new designs will draw significant
interest in Asia, particularly in Hong Kong and Singapore, whose
cellphone-toting masses are keen to adopt the latest consumer technology.
Now that people have caught on to using mobile phones for chatting,
Galvin says the industry faces a new challenge: promoting wireless data
applications. Mobile-phone makers believe that cellphone users will also
want to turn to the Internet as a key information source. New phones--or
what the industry refers to as "wireless information devices"--will be
designed to maximize the Internet's potential. Nokia officials say that
10%-15% of all mobile phones sold within two years will have Internet
browsing capability--a task normally reserved for a computer with a much
larger screen than a mobile phone.
Galvin says manufacturers have done a lot of work to try to make such
pint-sized browsers usable tools. Small phones' screens will probably
impose limitations. For example, they might relay only short e-mail
messages or access Internet services that use few graphics and small
amounts of information. Users could tap into the Internet, buying or selling
shares or reserving tickets for the opera at Web sites specifically designed
for cellphone users.
Larger business-oriented phones would have bigger screens--about the
size of those found on electronic organizers--capable of displaying longer
e-mail messages and accessing more-complex Internet sites. Now
developers are busy creating software that will allow cellphones access to
the Internet without a traditional computer and keyboard.
In a move to dominate this nascent market, Motorola, Ericsson and Nokia
have teamed up in a joint venture called Symbian. It will work with Psion
Software of Britain to research and develop new ways of using Psion's
Epoc operating-system software in mobile phones, giving them
Web-browsing capabilities.
The three cellphone makers have also agreed on a common technology for
easing connections to the Internet, called the Wireless Application
Protocol, or "WAP." At the technology fair, Ericsson lifted the curtain on
its R380 media phone: Due out next year, it will use both Epoc and WAP.
Nokia plans to introduce its 7110 Communicator phone within a few
months; it will be able to use WAP to surf the Internet.
Next year, SmarTone in Hong Kong and KG Telecom of Taiwan will
introduce high-speed wireless data access to their networks, making it
quick and easy to browse the Internet. Service providers elsewhere in Asia
are likely to follow suit. Even faster data-transmission speeds will
eventually be possible now that Ericsson and U.S. telecoms manufacturer
Qualcomm have settled legal and commercial differences that had held up
agreement on a common standard third-generation wireless systems, or
"3G."
With such high-speed data transmission available to mobile-phone users,
videophones that allow callers to view each other while they're talking may
finally gain currency, too. After all, says Galvin: "People just love to
communicate, and they'll keep finding new ways to do it."
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