CTIA, the US mobile telecoms tradeshow, has produced a deluge of announcements this week. I’m going to pick out four which represent strong trends within the industry.
1. Industry adopting scalable, vector-based engines for interface and applications layer
Adobe and Verizon Wireless, the second largest carrier in the US with about 51m customers, announced they will work together to implement Flash Lite for both interfaces and third party applications.
Vector-based engines such as Flash and SVG enable user interface elements to be dynamically scaled to fit a wide range of screen sizes and orientations. They also leverage the existing expertise of over a million designers who are already using these technologies to create web applications. DoCoMo was the first network operator to deploy Flash, making it a standard requirement for all i-Mode handsets, and it has reaped the rewards over the last few years through the emergence of a a vibrant third party content market.
The industry has been seeking a truly cross-platform third party development environment for some time. WAP alone isn’t rich enough, Java has been hamstrung by the fragmentation of VM implementations, but a combination of Flash or T-SVG, XHTML and emerging technologies like AJAX could provide a solution which is widely accessible to developers and carries a low implementation cost for handset manufacturers and operators.
2. MVNOs turning to new handset manufacturers for highly customised handsets
I’ve been watching Pantech with interest for some time. The South Korean handset manufacturer is growing rapidly in both GSM and CDMA markets through a combination of innovation, acquisitions and aggressive pricing. I believe it could become one of the world’s top 5 handset manufacturers within 2 years, most likely through acquisition.
At CTIA Pantech announced it is providing the content-focused MVNO Helio with it’s ‘Hero’ handset. This carries a 2 megapixel camera, 240 x 320 display, 70 Mb of memory, T-Flash slot and MP3 player. It has been customised with Helio’s interface, applications and industrial design.
No matter how much lip-service the handset majors pay to customising devices for individual operators, they are being beaten to the jump by nimble, aggressive players like Pantech. It remains to be seen how consumers will respond to MVNOs such as Helio, but if they enjoy success, it stands to reason that the major manufacturers will start to lose market share unless they find a way to be match the flexibility of smaller OEMs.
3. Mobile handset becoming a payment mechanism for both mobile content and other purchases
Bango and mBlox announced they are working together to integrate mBlox’s Premium SMS billing with Bango’s portal-based ‘browse and buy’ technology. This means virtually any mobile subscriber can now buy rich mobile internet content, such as access to subscription sites and games, from any third party provider and charge the cost to their bill or pre-paid account.
mBlox also made another interesting announcement recently, agreeing a deal with Vodafone to offer flat-rate data pricing to third party providers who sell content with big data sizes, such as music and video.
Paypal announced a few weeks ago it was extending its service to allow people to send and receive money from their Paypal accounts using text message. At CTIA, it said it had reached agreements with MTV, Fox, Bravo, Viacom and the NBA to enable users to buy goods such as compact discs, DVDs and apparel by text message.
This is an early US example of how the mobile handset may become a payment mechanism for physical goods, as well as virtual services. Japan, of course, is already some way ahead of this trend. Leading operator NTT DoCoMo has been investing in credit card companies, retailers and point-of-sales technology to allow subscribers to use their handset for purchasing travel tickets, groceries and more. This week it announced it was launching a DoCoMo-branded credit card account linked to its mobile digital wallet technology.
4. Relentless drive to cut costs prompting cross-industry, cross-border collaboration
Texas Instruments, NEC and Matushita are rumoured to be in talks on a joint venture to create chipsets and software stacks for W-CDMA 3G handsets. This kind of collaboration is likely to increase in the future as more manufacturers feel the pressure from operators and competitors to drive down costs.
Incumbent network operators, MVNOs and content providers are trying to convince consumers to do more and more with their handsets, but they know it will only happen if the hardware can be supplied at the same or lower cost than before. This is creating a disconnect between the capabilities chipset providers and handset manufacturers can deliver and the pricepoint operators want to hit.
Smaller manufacturers will have to find partners otherwise they will see their margins squeezed to razor thin levels.