HETTING Consulting Newsletter February 2009
Wanted: fresh ideas for the mobile industry
Last week’s Mobile World Congress (www.mobileworldcongress.com) drew some 47,000 delegates - including no less than 2,800 CEOs from across the globe - to Barcelona, Spain for the third consecutive year. The mobile industry’s premier event is still a spectacle of gigantic proportions. But the industry also seems to be suffering from a conspicuous lack of fresh ideas.
Under the perpetual gloom of the financial crisis the MWC attracted fewer visitors than last year, and perhaps also lacked a clear theme and business focus. Exhibitors offered a slew of new smartphones with touch screens, and a few new models had even sprouted solar panels on their backs. But trying to spot a revolutionary innovative idea with some potential to launch the mobile industry into a new period of growth - or let alone breakeven – was hard work.
On the other hand there was no shortage of the usual multi-floor corporate pavilions and man-sized billboards, many of which were decked out with the names of big Asian brands such as Huawei, Samsung, and LG. Many new products from the Asian manufacturers closely mimic the iPhone, but Apple’s iconic brand – arguably the progenitor of the biggest mobile success of recent years – escaped from its attackers unscathed. The deft smartphone market leader had as usual decided to stay at home.
”We’re out of ideas, but at least we’re pretty good at copying” seems the appropriate adage for the many manufacturers that have no other competitive strategy than to follow closely in the footsteps of Apple with wannabe iPhone handsets that usually fall well short of the real thing. Others seem to be following in the tracks of RIM and Blackberry - also without adding anything substantially new.
ST Microelectronics and Ericsson used the MWC as an opportunity to introduce the world to the next big thing in chipsets for mobile phones: ST-Ericsson (www.stericsson.com). The newly merged chipmaker is clearly not going to win the award for the most imaginative new corporate name, and has botched a golden opportunity to reinvent itself through a newer and sharper brand. Instead both companies have relied on the stale corporate logic that presumes that the new merged brand – and value proposition for that matter – somehow is equal to the sum of the values of the two previous brands. Just like Sony Ericsson and Nokia Siemens Networks has done before them.
A flourish of green technology is upon us, and the solar-powered phones have not only been created to conform to the highest standards of minimal CO2-emissions and corporate political correctness. The new handsets could potentially become big sellers in developing countries and in the BRICs – Brazil, Russia, India, and China – where there is still some mobile market growth to be had. The MWC also renewed its focus on alternative network equipment for developing countries, including impressive site solutions from the Swedish company Flexenclosure (www.flexenclosure.com). Their flagship product is a base station shelter complete with solar panels and even a wind turbine. The solution is not only green, but also proposes to resolve the real and serious problem of scarce access to grid-based power in many developing countries the world over. One can only hope that the price of the shelter is low enough to attract e.g. the interest of mobile operators in Africa.
LTE on standby
On the networking side the industry-wide buzz about the next generation of mobile broadband technology – namely LTE and not WiMAX - was still very much alive. But in contrast to the sweeping rhetoric of days gone by, this year’s industry pundits were much more reluctant to embrace the future success of LTE as a foregone conclusion. LTE sounds promising with peak rates of up to 100 megabits per second, and the technology is slowly beginning to emerge from the murky depths of the suppliers’ labs in the form of demos and prototypes.
But with the end of financial crisis nowhere in sight, and with HSPA and its kin still in its growth phase as the preferred technology for mobile broadband, many operators are not rushing to conclusions. Most are not ready to commit to fresh billion-dollar network investments, and several of Europe’s biggest MNOs have formally communicated that they intend to wait another couple of years before deploying the new, super-fast LTE networks.
The only mobile operator to already announce preferred suppliers for the first American LTE-network in the 700 MHz band is Verizon. The winners of the supply contracts were – surprise surprise - Nokia Siemens, Ericsson, and Alcatel-Lucent. Verizon is raring to get on with the business of LTE mostly because its ageing CDMA2000 network is having a difficult time trying to compete against others who have long since jumped on the HSPA bandwagon. Verizon’s new LTE-network will reputedly deliver speeds of up to 60 megabits per second and is due to be launched next year if all goes according to plan.
The world’s largest supplier of network equipment was true to form in a more exclusive mood than ever. You cannot simply walk into Ericsson’s mega-pavilion: you need nothing less than a formal invitation. Nokia Siemens was more hospitable, and gladly showed off their latest network kit on the first floor of their stand. The latest and greatest from Nokia Siemens are base stations that elegantly support all technologies from GSM to LTE with (nearly) the same hardware. In the long run this could mean big capital savings for the MNOs. The solution reasonably won one of the GSMA’s yearly awards for technical excellence.
China’s Huawei had their own outdoor headquarters, and their compatriots from ZTE also appeared bigger and better represented than previously. In particular Huawei is busy playing catch-up against market leader Ericsson and is well on its way to drawing level with Nokia Siemens as the worlds second largest mobile network supplier. Huawei has been successful in winning new business and grabbing market share in emerging markets well supported by the strong Chinese economy and – to some extent – the Chinese government. And Huawei’s 3G products are reputedly as advanced and well functioning as those of Ericsson and Nokia Siemens.
Mobile phones for kids
Since the launch of the iPhone the mobile industry has frankly been in a dire need of a new killer application or handset that sets itself apart from the grey mainstream of average products. A fresh approach to developing an untapped market segment comes from Danish start-up Wigomo (www.wigomo.com), who has developed a mobile phone service for school kids. Strangely, the kids’ segment has so far been left largely untouched by operators although kids arguably are the last group of phone-less individuals in the West. Has the time finally come for the kiddy-phone?
Wigomo’s mobile is produced in China and is together with the tailor-made subscription designed to give conscientious parents strict control over usage. Parents can decide with whom kids are allowed to talk and for how long. The phone is equipped with a GPS receiver so that you can find it again when it gets lost – and it invariably will. The phone definitely does not look like a toy because the company believes that kids prefer phones that look like the real thing. Wigomo sounds like a company that knows how to listen to kids and that is a good sign.
The concept could be a winner, but it will be interesting to see if modern parents can be coaxed into giving their school-age kids their own phones. On the other hand there are probably lots of kids around who just cannot wait to get their hands on a Wigomo. And anybody with a son or a daughter knows what clever bag of tricks kids can come up with when they really want something.
Are the Israelis the best B2B marketeers?
A casual walk through the pavilion-city of Fira Montjuic is an impressive sight, but it is still more than a little odd that so few companies are able to get their key messages across effectively in text and pictures. Most of the stands lacked both punch and clarity despite the deluge of dancing girls, massive flat screens, and other glittering paraphernalia. In many cases it was simply to difficult – even for the experienced mobile professional – to ascertain what the various companies do, and why one should pay them any attention. And that is a great pity, particularly when considering the exorbitant price of exhibiting at the MWC.
But perhaps the foreign trade delegation of Israel can teach us a something about the dwindling value of gorgeous models dressed up as Lara Croft and flashy fluorescent flat screens. At this years MWC Israel companies had settled into a modest location in the least elegant and most confusing of the exhibition halls – Hall 4 – in what looked like an old-fashioned corporate indoor landscape of office cubicles.
More than 50 Israeli companies had each been allocated a plain white desk for demonstrating their products, and this was done effectively and without further drama. The Israeli stands were very well visited and positively exuded innovation and a shrewd business sense.
Despite the diminutive size of the country the Israeli telecommunications industry covers so much territory that it nearly presents itself as a microcosm of the industry as a whole. Here a few examples of Israeli companies that are challenging the stale thinking within the industry:
Why is every PC-user on the planet bogged down with having to install anti-virus software and endless security updates, when the broadband network can and should do the work for you? The solution is so obvious that it is hard to understand why all broadband service providers do not already offer a “clean” connection. The security solution provided by Aladdin (www.aladdin.com) makes sure that all streams of data are cleansed of any virus before it gets to your personal computer.
Everyone knows that social networking is an Internet megatrend. But why not exploit this for the purposes of focusing your marketing efforts? The small Israeli company Datanetis (www.datanetis.com) has developed a software solution that reputedly is capable of identifying the most influential individuals in a group of customers. The influential people affect the purchasing decisions of the others, and directing marketing efforts towards them means a more focused, cheaper, and more efficient marketing effort. This is data mining 2.0.
Should not all kinds of content and services on the Internet be accessible from a mobile phone with a browser? The company Mintmark (www.mintmark.co.il) makes it simple to reformat and launch existing Internet content and services for access via the browser of pretty much any recent mobile phone model.
Here is a solution for all the content providers that are dog tired of being tied to a particular network operator and want to extend their coverage of the market: The company TVinci (www.tvinci.com) provides a platform that converts regular TV channels into interactive, web-based TV. This means that subscribers can view their favorite TV channels not only on their TV at home but also on the go via mobile broadband or any other broadband connection – and they can watch their favorite TV-shows when they want. The solution requires that some contentious issues regarding content ownership rights are sorted out – and another prerequisite is that broadband service providers refrains from blocking this kind of web-TV (of course they should never do this – but they can – an probably will).
HETTING Consulting is an independent consulting company offering marketing, public relations, critical journalism and techno-strategic consulting primarily to companies within the telecommunications industry. Learn more about HETTING Consulting at www.hettingconsulting.com. This newsletter is issued as a free service to inform customers and colleagues of the latest trends and developments within the telecoms industry. If you do not wish to receive the newsletter please send an email immediately to claus@hettingconsulting.com and you will be removed from the distribution list.
Copyright 2009 - HETTING Consulting - mobile: +45 25 34 17 05
Date: 26-02-2009
Author: Claus Hetting
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Copyright 2008 - HETTING Consulting - Gustav Wieds Vej 29, st. tv. - DK-8000 Århus C - Denmark - Phone +45 25 34 17 05
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