Style Counts

Mobile phones are the most widely sold consumer electronics product in the world. By some estimates more than 600 million handsets are sold every year. That's five times the number of TVs or personal computers sold annually. And every successful producer of consumer electronics will tell you that "style" counts as much as "price." So maybe industry executives ought to focus a bit more on the details of the devices as much as the pricing and packaging of their services plans. Fair enough?

There's clear upside, as well. Tired of selling voice minutes or bandwidth forever-decreasing retail prices? Then stop selling commodities. The point is that the ability to talk is just part of the value of a mobile handset, as we would all agree. There's all the text, camera, Web access, faceplate customization, ringtones and other personalization angles.

The mobile phone is a consumer electronics product, not a "telecom" product. So fashion is important. Looks are important. Image is important, and not just for the super trendy younger users executives normally assume are the only people who care about the details of their devices. Lots of people care about those things, because most people care about the little details of their highly-used consumer electronics products.

I suppose it isn't necessary to dwell further on the iPhone, huh?

Site Temporarily Unavailable

Probably not the best way to run a video download service such as Wal-Mart has launched.

Wal-Mart's beta service includes more than 3,000 movie and TV titles for view on PCs, laptops and portable media players. All the major studios are on board and new movie releases will be available for video download on the day of the DVD release. The price for new movies ranges from $12.88 to $19.88. Catalog titles cost $7.50. TV shows cost $1.96 per episode.

Wal-Mart allows customers to purchase the physical DVD and have the option of downloading the same title for a small additional price to use on portable devices and PCs. Among the likely results are further deals by studios with other services such as iTunes.

He said other studios have been reluctant to participate due to fear of a Wal-Mart reprisal. The chain represents a large percentage of Hollywood's multi-billion dollar DVD business. If a studio agreed to sell movies on iTunes at a price too low for Wal-Mart's taste, that studio might suddenly find its movies removed from Wal-Mart's shelves.

Wal-Mart's video download service doesn't work with Firefox version 2.0.0.1...aside from not working at all on any browser.

The Business Case for Fiber Just Got Better

According to TVover.net, Verizon customers in West Virginia have suffered outages because thieves now are after copper, and telecom cables contain lots of copper. The most recent copper cable theft occurred at the end of January, when a twenty-foot-long section of cable was stolen, causing an outage which affected not only residential customers but also the emergency departments in the area. Verizon has lost a significant amount of money responding to the thefts. This used to be a problem confined to developing countries.

The upshot, however, is a potential uptick in costs to maintain copper plant, plus financial penalties for violating service level agreements, plus increased customer churn.

More iPhone Ripples

Though there has been speculation about the ultimate impact the iPhone will have on the wireless business, one effect is undeniable. Other phone makers are going to have to respond, pushing device development in a new direction. Samsung Electronics Co., for example, has unveiled a new mobile phone that features some of the sleek design and functions of the iPhone.

The Ultra Smart F700 operates using a touch screen and also runs a version of the Mac OS X operating system. The phone also features a slide-out key pad as well.

Wireless Incumbents Will Claw Back

Over the next five years, incumbent mobile service providers will start to reclaim lost market share to virtual operators, in large part because advanced features is growing and low cost calling simply isn't enough reason to go with a virtual operator, says Juniper Research. In fact, Juniper predicts the trend will occur in both developed and less developed mobile markets.

Even in the hot mobile space, demand for simple, low cost calling is declining while use of, and demand for, advanced features is growing. At the same time, basic calling needs increasingly can be met other ways. So the issue, as it always is, is a complex assessment of "value for money."

At one point, the equation was simpler. No-frills voice services delivered what was perceived as lots of value for less money. The value equation now is much more complex, including text, Web access, personalization, dual-mode operation, even the style and feel of a handset, and Apple's iPhone is the best current example of that.

Users these days now have a more complex, richer set of inputs that form the value mobile communications represents. Fashion, for example, now is an important facet of the value.

So though the trend has lagged similar developments in the wireline space, new value requirements are bubbling up in the wireless space as well, with obvious implications for providers of no frills services.

Mobile Over the Top

BridgePort Networks, Oberthur Card Systems and CounterPath Solutions have announced commercial availability of MobileSTICK, a USB stick-based way to provide mobile calling and texting "over the top" from any broadband connection.

MobileSTICK launches a PC softphone, secured by a SIM card that uses the existing mobile phone number to make and receive phone calls, SMS and multimedia (MMS) messages. The user’s existing mobile remains active and continues to utilize its existing SIM.

So the obvious impact includes enhanced ability for mobile operators to displace even more landline traffic, without building a network. Tangential benefits include creating a new revenue stream and offloading traffic from atmospheric to wired networks, conceivably helping reduce new capital investment

Almost as a side benefit, MobilSTICK provides a sort of "one number" feature for some portion of a user's calling and communicating.

Over the Top, Everywhere

One reason virtually every service provider now worries about "over the top" apps that compete with carrier vertically bundled applications is that every customer segment now has access to over the top services. In the consumer market there are independent VoIP, video, IM and portal-based applications disassociated with any particular carrier. In the small and medium business space there are hosted PBX, managed security and business VoIP offerings. In the enterprise there are managed services put together by large system integrators. Note also that Cisco has become one of the largest managed service providers. On other fronts there is growing pressure to unlock mobile phones so any device can be used on any network (GSM, CDMA or Wi-Fi). That's not to say we have reached the end of all vertically-bundled apps. It is simply to note that horizontal, unbundled apps grow with each passing day. And that the ability to customize, in the business space, and personalize, in the consumer space, increasingly becomes a primary value add.