Carriers conspire to cage 800lb reindeer

What's the platform? The service or the phone?

  • alert
  • submit to reddit

Boost IT visibility and business value

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 of PMG's here 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.

The Essential Guide to IT Transformation

More from The Register

next story
Scotland's BIG question: Will independence cost me my broadband?
They can take our lives, but they'll never take our SPECTRUM
Bring back error correction, say Danish 'net boffins
We don't need no steenkin' TCP/IP retransmission and the congestion it causes
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
NBN Co adds apartments to FTTP rollout
Commercial trial locations to go live in September
Samsung Z Tizen OS mobe is post-phoned – this time for good?
Russian launch for Sammy's non-droid knocked back
Telstra to KILL 2G network by end of 2016
GSM now stands for Grave-Seeking-Mobile network
Seeking LTE expert to insert small cells into BT customers' places
Is this the first step to a FON-a-like 4G network?
What FTC lawsuit? T-Mobile US touts 10GB, $100 family-of-4 plan
Folks 'could use that money for more important things' says CEO Legere
prev story


Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.