CTIA: Mobile world looks beyond phone calls
For about 72 hours this week, the U.S. cell phone industry will stop talking about minutes.
Though fierce competition over plain voice calls will form a backdrop to CTIA Wireless festivities in Atlanta that kicked off with pre-show events on Sunday and will end Wednesday afternoon, many discussions and product unveilings will involve multimedia and other advanced services. That's where mobile operators see the potential for greater revenue and more loyal subscribers.
The annual show, sponsored by the Cellular Telecommunications & Internet Association, is taking place at the Georgia World Congress Center.
Many product and partnership announcements at the show will involve premium offerings such as multimedia messaging, streaming music and video as well as push-to-talk, the "walkie-talkie" feature that has proved popular with some U.S. mobile phone users. These services can take advantage of the growing capacity of North American mobile data networks, which are set to evolve over the coming months from dial-up-like speeds to performance close to that of DSL (digital subscriber line).
With those kinds of speeds available or on the way, mobile operators are looking for services to complement "commodity" voice calls, said Roger Entner, an analyst at The Yankee Group, in Boston.
"This is the big hope," Entner said. He predicts U.S. subscribers will eventually watch music videos and check clips of ongoing baseball games during the workday. He compared mobile success to a three-legged stool, where operators need not just the right network and the right client device but the right applications.
"They want to be the venue for something other than just vanilla voice," said Seamus McAteer, an analyst at Zelos Group Inc., in San Francisco. One thing operators hope to do is draw customers into a network of users, as Nextel Communications Inc. has done with its push-to-talk service, which has become the venue for collaboration among workers in enterprises, he said.
"If they become the venue for mobile interactive gaming ... every self-respecting 15-year-old gamer will want to belong to that network," McAteer said.
However, sexy new services won't change the fact that the market for regular voice calls still makes up the bulk of operators' business. "They can't forget their knitting as they go after these potentially higher margin opportunities," McAteer said.
Announcements at the show will cover a broad range of products and partnerships.
Qualcomm Inc. is set to announce Monday that it will incorporate RealNetworks Inc.'s media playing software into the software stacks for two new mobile device chipsets, said Ian Freed, vice president of mobile products and services at RealNetworks. Qualcomm's MSM6100 chipset will go into CDMA2000 (Code Division Multiple Access) phones. Its MSM6250 is designed for future phones that can use both CDMA2000 and WCDMA (Wideband CDMA), the 3G technology to which most GSM/GPRS (Global System for Mobile communications/General Packet Radio Service) operators are migrating, he said. These dual-mode devices will let subscribers easily travel between CDMA and GSM services, Freed said.
The deal will help RealNetworks extend its reach into CDMA2000 and WCDMA, Zelos's McAteer said. Qualcomm provides the chipsets for most CDMA phones and should also be competitive in WCDMA, he said. RealNetworks already provides software for GPRS phones from Nokia Corp., Motorola Inc. and other vendors, according to Freed.
Having RealNetworks software on the phones they sell could give mobile operators a strong incentive to use RealNetworks' server software for delivering content, Freed said. Though users of the phones would be able to find and enjoy content form other kinds of servers, they probably could get more from the mobile operator's Real server and it would be easier to use, according to Freed.
RealNetworks has blazed a trail for media-playing software in cell phones, and its main competitor in PCs, Microsoft Corp., lacks a significant presence in this area, said McAteer. Microsoft does sell media server software to mobile operators and has partners that make client software to work with its servers, he said. However, McAteer said standard formats such as the MPEG-4 video specification will act as common denominators.
Siemens AG's Information and Communication Mobile Group will announce a push-to-talk application based on VOIP (voice over Internet Protocol) that has been in trials at mobile operators worldwide, according to Ubiquity Software Corp., which makes the application server on which it will run. Siemens will offer the push-to-talk application to carriers as part of its Siemens IMS (IP Multimedia Subsystem) package, said Jeff Liebl, vice president of marketing at Ubiquity, which is based in Newport, U.K.
Because it is based on SIP (Session Initiation Protocol), an industry standard for unified IP communications, the push-to-talk software can be integrated with other capabilities such as presence, which also can run on Ubiquity's application server. That means subscribers can have a single login for many types of communications and use a single "buddy list" for all, Liebl said.
Push-to-talk has proved popular with business subscribers of Nextel, which pioneered the service, analysts said. For consumers, such a service using VOIP could be appealing because of cost and the ability to reach friends and family immediately, Yankee Group's Entner said. He believes one-quarter to one-third of all U.S. cellular subscribers eventually might sign up for push-to-talk. However, being able to use it with friends on other carrier networks will be a key to making it useful, analysts said. That's not possible yet but should come with enhancements to the Open Mobile Alliance's POC (Push-to-Talk Over Cellular) specification on which Siemens based its application, Liebl said.
Standards alone won't make that happen, IDC analyst Shiv Bakhshi cautioned. In addition to interoperability, there will have to be clearinghouses among the carriers, he said. In addition, there's no guarantee consumers will embrace push-to-talk, he said. Nextel's offering has caught on because it was tied in to an overall set of services for businesses, he said.
There will be no shortage of phone news at the show, including handset introductions by Kyocera Wireless Corp., Audiovox Communications Corp., Samsung Electronics Co. Ltd. and Nokia Corp.
Kyocera will unveil seven new handsets at the show, including the Koi, a CDMA phone with a 1.2-megapixel digital camera with video camcorder capability. The company's second CDMA push-to-talk phone, the KX440, also is set to debut in Atlanta. Both are scheduled to ship globally late in the second quarter, according to a company statement.
Nokia's plans include the introduction of several new handsets and the U.S. debut of the Nokia 7610, the company's first phone with a megapixel camera, according to a company representative. Samsung will introduce about 10 new phones, including its own 1.0-megapixel phone with video capability, a company spokeswoman said.
In addition to unveiling new handsets, Samsung is set to announce Monday that its OneNAND flash memory product is available, and will demonstrate the chip during the show. OneNAND makes use of an integrated flash memory controller to improve memory performance in next-generation cell phones. Samsung will also demonstrate its multichip packaging technology for integrating different types of memory into a single handset.
VeriSign Inc. on Monday will unveil along with Telespree Communications what a VeriSign executive called the "self-provisioning phone," a system for carriers that lets new customers buy a phone off the shelf without having to interact with a salesperson. The customer can set the phone up, get a phone number, have their credit checked and choose and sign up for a service contract through the phone itself, over the mobile operator's network. The system is designed to eliminate lines of customers waiting for help at stores, according to Vernon Irvin, executive vice president of the Communications Services division of VeriSign, in Mountain View, California. Later, customers will be able to do this on a PC via the Internet, he said.
VeriSign aims to showcase its integration of security, billing and directory technology, which operators are seeking as part of a move away from small vendors of individual functions, Irvin said. He sees the company's size and integrated technology as key for mobile operators that need to scale up their services as the industry consolidates. At the 3GSM World Congress last month, VeriSign announced integration of online payment and prepaid and postpaid cellular billing systems.
Also along those lines, VeriSign will announce on Monday a system to integrate billing from many different Wi-Fi hotspot services on the user's mobile phone bill and an acquisition that will let the company enhance its MMS (multimedia messaging) infrastructure and integrate it with other VeriSign technologies.
The company's acquisition of the assets of Unimobile will allow it to do its own MMS system development, scale the system more effectively and integrate the system with other VeriSign technologies. It also adds one more major U.S. mobile operator to VeriSign's MMS customer base; the company previously had two major U.S. customers, Irvin said.
U.K. companies will be pitching their mobile expertise at a British Technology Partners Pavilion and a Scottish Pavilion on the show floor, looking for partnerships with U.S. companies. British companies have been able to concentrate on the uses of mobile technology because the U.K., along with many other countries, standardized on GSM years ago, said Dale Smith, vice consul and information and communication technology sector advisor at the U.K. Consulate-General in San Francisco.
"In other parts of the world, a lot of the investment went into the application layer. ... In the U.S., people are still battling it out at the lower layers," Smith said.
A news release sent out on behalf of the consulate pointed to "innovative" uses of mobile technology such as managers laying off workers by SMS and wives tracking their husbands via location-based services. Smith chuckled at those examples, saying they were just extreme cases he discovered as part of a research project.
"There are some unique trends that are under way in the U.K., and these applications are just a set of exciting examples of some of the creativity that people have applied to using the technology," Smith said.