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Wire & Cable ASIA – November/December 2008
Trends in wireless buying
and usage show data
applications gaining
on voice
In Telecommunications Online, Doug
Allen reviewed two recent studies
offering “solid proof” that mobile
devices are fast reaching market
saturation for key demographics,
pushing providers to look beyond
VoIP (voice-over-Internet protocol)
calls for revenue.
The trend will compel them to
look more closely at data appli-
cations, including broadband, to
increase margins. (“A Revenue
Shift for Cell Phones: Data Is King,”
17
th
September)
The British broadband analysis
company Point Topic reports that
broadband value-added services
brought in $25.7 billion globally in
2007. John Bosnell, senior analyst
at Point Topic, told Mr Allen,
“[We] estimate that value-added
services were 10% of total broad-
band revenues, which includes
subscriptions, in 2003. But by the
end of 2007 that had increased to
over 30%.”
As it gets harder to make a profit
in the hyper-competitive line rental
market, this source asserted,
operators and suppliers have to look
to add value, and revenue, with their
service offerings.
In the second of these studies
on wireless usage and where it
is headed, Jupiter Research, a
division of the American technology
and market research company
Forrester Research, predicts that US
carriers will add only 26 million new
subscribers by 2013 – for a grand
total of 266 million users.
Wireless-based social networking
applications will thus become a
centre of communication that will
become almost as vital a cell phone
function as voice is today.
Mr Allen noted that, while the
Jupiter report does not break
out VoIP revenue figures for
wireless mobile devices, it does
suggest the increased role data
applications will play in wireless
service bundles. He took note of
“a slew of announcements for new
location-based services,” even over
the few weeks before his article
was posted.
Elsewhere in telecom . . .
A study released 12
✆
th
September
by the University of Oxford’s Saïd
Business School and Spain’s
Universidad de Oviedo ranked
42 countries on broadband
quality, awarding each a score
based on Internet upload and
download speeds and on the
length of time required for
online data to reach a computer.
The researchers bestowed the
highest score on Japan, with
Korea in fifth place. The others
in the top ten were all European,
including Germany, Switzerland,
Scandinavian nations, the former
Soviet states Latvia and Lithuania,
and Slovenia in the Balkans. The
US made only 16
th
place.
Nokia Corp said 6
✆
th
September
that its third-quarter global
market share would decline from
second-quarter
levels,
citing
aggressive price cuts by its rivals
that induced a 10% decline in the
Finnish company’s share price. The
world’s biggest cellphone maker
had issued a more optimistic
forecast in July, when it said its
market share would be about
the same in the two quarters:
about 40%. Nokia said it had
made a “tactical decision” not to
match the price cuts of some of
its competitors, seeking instead
to be “sustainably profitable in
the longer term.” The company,
which sells more phones than its
three main rivals combined, said
it still expected to increase its
market share in 2008.
Preparing to compete for busi-
✆
ness from cellphone handset
makers, Sweden’s Ericsson and
the French-Italian chip maker
STMicroelectronics said that
they will combine their wireless
chip and software units into a
new joint venture to be based
in Geneva. The new company,
with sales projected at $3.6 billion
a year, will be a rival to Qual-
comm (San Diego, California)
and Texas Instruments (Dallas),
currently the major providers of
cellphone chips. Not long before,
STMicro had merged its wire-
less business with that of NXP of
the Netherlands.
Sony Ericsson unveiled its much-anticipated Xperia X1 mobile device
on 15
th
September. Sales of the Windows-based product are set for
30
th
September in Britain, Germany, and Sweden; and across Europe,
Asia, and Latin America during the fourth quarter.
As noted by BusinessWeek Paris correspondent Jennifer L Schenker,
much is riding on the Xperia for Sony Ericsson as it strives to differentiate
itself from rivals such as Apple, of the US, Samsung of Korea, and
Finland’s Nokia. She wrote, “Analysts say Sony Ericsson has become
too reliant on its Cybershot and Walkman brands, which have grown a
bit stale. The London-based company’s performance in 2008 has been
lackluster.” (“Can Xperia Redefine Sony Ericsson?”, 15
th
September)
The Xperia was well received at the Mobile World Congress Barcelona,
in February, but analysts told Ms Schenker that the six-month lag
between announcement and launch let the buzz go off.
Ericsson is working with a third-party manufacturer, Taiwan’s HTC,
which has experience with Windows. But HTC has come out with its own
Windows-based high-end phone, the Diamond. Also in the interim, Apple
launched the iPhone, and Samsung and Nokia introduced high-end
models that compete directly with the Xperia.
Sony Ericsson’s Xperia is here, but excitement
dwindled between announcement and launch