Camera phones predicted to outsell digital still cameras by 2004
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With the impending arrival of MMS, operator and OEM interest in embedded-camera capabilities has steadily risen. Device manufacturers must develop sound product development and segmentation strategies to capitalize on the pending demand for devices with this feature.

Strategy Analytics expects 16M camera phones will be sold worldwide in 2002, rising sharply to 147M in 2007.

Camera phones will outsell digital still cameras worldwide by 2004. Japan and Korea are the world’s leading camera phone markets, accounting for almost 90% of total sales in 2002.

Embedded-camera PDAs are expected to play bridesmaid to handsets and will account for only 6% of total PDA sales in 2007.

This Market Forecast provides global estimates of cellular handset, PDA, and digital still camera sell-through by region through 2007 and analyzes drivers for embedded-camera diffusion by region.

SOURCE Stategy Analytics Back to News Reports

Disposable cellphones ready for launch (Back to News Reports)

31 July 2002 - Hop-On the developer of disposable and fully recyclable cell phones, today announced that it has received approval from the Federal Communications Commission (FCC) for the world’s first CDMA disposable cell phone. Code Division Multiple Access (CDMA) is a digital wireless technology that was pioneered and commercially developed by Qualcomm. Hop-On’s phone is a digital, single mode cellular handset that operates in the 800 MHz frequency band.

Peter Michaels, Chairman and CEO of Hop-On, commented, “While this is a major milestone, the important point is that this approval allows Hop-On to finalize agreements with strategic partners.”

Hop-On’s CDMA disposable cell phone is fully recyclable and will offer a rechargeable battery and the capability to add on additional minutes.

Hop-On mobile devices are plastic, two-way phones the size of a deck of playing cards. Users talk and listen to callers via a microphone/earpiece connected by a thin wire. Customers buy scratch cards in increments of additional talk time of 60, 90 and 120 minutes, according to company officials.

The aim is to fill the gap left by established phone makers and wireless network operators who fear that selling low-cost phones and services will further undermine the $50-$55 that the average US mobile user spends per month, analysts said.

Hop-On is aiming to sell its stripped-down mobile phone and 60 minutes of initial service for a $40 (£25.5) flat fee, through an unnamed "major CDMA" carrier. CDMA is one of the mobile phone network formats used in the US, along with TDMA, GSM and others.

Hop-On, which hopes to sell the phones at major retailers, corner stores and gas stations, said it received a go-ahead from the US Federal Communications Commission for phones with a low-cost chipset from Philips Electronics based on Qualcomm technology.

Michaels also hopes to win the FCC's blessing in 45 to 60 days for a second, less-expensive model that would be priced at $29. This is based on the international GSM mobile standard. It would be aimed at Europe and eventually the United States.

SOURCE Hop-On Press Release Back to News Reports

Ericsson releases 3G applications (Back to News Reports)

31 July 2002 - Ericsson announced last week that it is making fifteen 3G applications available to mobile phone network operators to allow them to show the potential of third-generation mobile services.

The programs -- which were developed both in-house by Ericsson and also by independent developers -- include business applications, multiplayer games and Web browsing software.

Ericsson is sending the complete set of 3G applications to 40 mobile operators, and it hopes they will use them to demonstrate 3G to their customers. The Swedish company thinks that operators could also use them as part of their commercial 3G packages.

"These 3G applications are all really exciting," claimed Ericsson's Kevin Nicholl in a statement. "They are interactive, have rich content, great graphics and all of them used bandwidths provided by WCDMA (3G)," Nicholl added.

Several of the applications are aimed at enterprise customers. These include a mobile version of Microsoft's NetMeeting video-conferencing program, an application that gives corporate LAN access, and a workforce management application that should enable users to coordinate activities such as work orders and scheduling from their mobile.

Other applications in the set are more fun, such as Sea Wars, a single or multiplayer game where the user is in charge of a fleet of battle ships.

Ericsson is also shipping an application titled MMS composer, which lets users generate their own multimedia messages.

SOURCE ZDNET UK News Back to News Reports

Avoid MMS pricing mistakes warns Ovum (Back to News Reports)

MMS offers mobile operators their first real hope for making money from the mass market with 2.5G and 3G networks. They need MMS to take off in a big way and as quickly as possible. A key means of achieving this is to make it affordable. The cheaper it is to buy MMS-capable handsets, and to send MMS messages, the more rapidly service usage will take off. However, there are limits on how far operators can go in this direction.

The early MMS handsets on the market are expensive. Ericsson's T68i retails at around euro500, including camera, and Nokia's 7650 is about euro700. On top of this, subscribers need to activate a GPRS subscription before they can even start using MMS. If operators want to get things moving quickly with MMS they have to consider subsidies. Vodafone in the UK, for example, intends to offer the Ericsson T68I, with the clip-on Communicam, to its MMS subscribers at around euro315 (£199) - this is about euro200 less than the unsubsidised price.

The pricing of the MMS photo messages is also critical. The issues are, how high (or low) the price should be, and what tariff structure should it follow? So far, the predominant approach to MMS tariffs has been 'one price fits all'. Most operators have adopted this model including Telenor, D2, Telecel, TMN, MMO2 and Sonera.

There is considerable variation in the level at which pricing has been set. Telenor, the first operator to launch MMS, set its per-message price at around euro1.25 (Nkr10). Subsequently, lower prices have been set by other operators, Sonera charges euro0.59 and the other four operators charge around euro0.40.

Although one-price-all is the favourite model so far, a few operators have entered the MMS market with a different approach to MMS pricing.

The Hungarian operator Westel has set three separate per-message prices, for 'small', 'medium' and 'large' messages

T-Mobil's UK operator has launched MMS on an all-you-can eat pricing model - for euro32 (£20) per month, you can send as many messages as you want

The Hong Kong operator CSL charges for MMS explicitly according to the GPRS network usage, plus an additional charge for premium content.

At this immature stage of the market, it remains to be seen which operators' approaches to pricing will be the most successful. But, at least now that MMS services are real instead of hypothetical, we are finally in a position to analyse this question.

SOURCE Ovum Research Back to News Reports

3G means business for Lucent (Back to News Reports)

Within the world of UMTS and W-CDMA, the most vocal proponent of a business-oriented strategy for 3G is Lucent, the US manufacturer who might sympathetically be described as a second tier wireless infrastructure vendor.

Lucent argues operators should adopt an enterprise-first strategy, and that the successful operators will be those who get their hands on the first wave of early-adopting, price-insensitive, high-using enterprise customers. Moreover, an enterprise-first strategy will work because all of the critical complements are already in place - while for a consumers-first strategy, they are not.

For example, Lucent says look at devices. There might be some good first tries at phones capable of displaying and navigating multimedia content but it would be a brave person who said the main issues have been resolved. But for enterprise users, the key devices are laptops and (to a lesser extent) PDAs - mature products with the battery life, processing power and user interfaces necessary for the applications they run. All they lack is connectivity, which is something that can be provided by 3G right now, using either a phone and cable (or radio equivalent like Bluetooth) or even a plug-in card.

Similarly, consider applications and content. For consumers, there are some interesting ideas about applications and kinds of content that require broadband but there are lots of issues - not least about digital rights management - to be fixed. But enterprise applications such as intranet access, email and access to specific tools such as CRM or ERP are well-developed and ownership of content is a non-issue here.

The enterprise wants nothing fancier than connectivity and it wants to pay for it in a straightforward way such as per Mbit.

So Lucent argues it all comes down to a business case. Enterprise users have the money and the past history of other communications services and products suggests that they are most likely to be the early adopters. Of course, enterprise users are cost-conscious but they can be persuaded in terms that they will understand, by reference to cost savings and productivity gains. The same doesn't apply to consumer users, who are being offered a new way to do something new, and for whom 3G is just another form of spending.

Lucent's efforts to turn round the supertanker are not motivated by pure altruism. The company appeared to miss out on the first round of 3G infrastructure contracts and they are keen to convince operators that they should be back on the shortlist for the second round of contracts. So Lucent is attempting to persuade operators to shift their focus to enterprise customers, as well as saying that it can help them in this arena.

It offers to assist with business plans, to bring systems integrators on board, even to train business development staff. It has established a relationship with a device vendor to ensure 3G wireless data cards will be ready for service launch.

So are we convinced? Not really. We appreciate and largely agree with Lucent's analysis of all the obstacles facing operators attempting to sell 3G to consumers. Yet different obstacles, of equal size and complexity, lie in the path to an enterprise-first approach. To start with, most operators have a chequered history when it comes to selling to corporates. There are a few honourable exceptions but most of them have spent the last few years putting on as many consumer customers as they can and have built their distribution capabilities and channels on that basis.

And the confidence that enterprise customers will adopt once you show them a business case is also questionable. Most don't like buying technology which is not 'bedded down'. There are long purchasing cycles and compliance processes to be negotiated. And those compliance processes won't be much fun, either. Enterprise customers have their own ideas as to what constitutes availability and reliability, and they don't fit too well with what operators are planning to offer at launch.

Most operators will be struggling to deploy enough coverage to meet their regulatory requirements while still not busting their capital expenditure constraints. That is likely to make for some wide but 'shallow' coverage. The networks will be best able to cope with lots of customers who use undemanding applications, rather than a few really heavy users. In other words, the launch networks won't be good for the enterprise user, as characterised by Lucent.

Most important of all, there are just not enough enterprise customers. As an illustration, Ovum's forecast for data revenues to operators from enterprise customers for 2004 is around $4bn. For consumer customers, the comparable figure is $44bn. Enterprise customers account for less than 10% of operators' revenues from data services. They might adopt faster than consumers and they might use data applications more, but their combined usage is not enough to touch the sides.

Focusing on enterprise customers at the expense of consumer applications is a recipe for going broke.

SOURCE Ovum Research Back to News Reports