The madhouse that is the opening day of CES is over and one thing is clear – CES has become more and more about mobile devices. Yeah, it’s always been a well tread topic at the show, but as faster and bigger wireless networks come online and the always-on mobile broadband connection becomes a reality, the main events and gadgets across the CES show floor are following suit.
Gates pushed the point last night, and the two morning keynotes on the first day were from the chiefs of the world’s largest mobile phone makers, Nokia’s Olli-Pekka Kallasvuo and Motorola’s Ed Zander (check out our latest Flickr photos).
Zander and Kallasvuo both dished a flow of new devices and services from the companies. The ra-ra fest is just what the companies need to help them forget about some of the clouds that have appeared in the mobile phone market — slower than desired growth in matured markets where sales are replacement phones, while emerging markets are growing well but buying up cheap phones.
Zander used the morning to talk about how Motorola would help consumers take their music and media with them wherever they are through the company’s mobile phones and digital living room devices. “Content moves with you,” he said and tried to illustrate the point by riding around the stage on a yellow bike decked out with a mobile charger. Later he demoed the company’s place shifting FollowMeTV technology, which allows users to view video, pictures and music in the living room on devices like digital cable receivers and on mobile phones.
On the music front Zander announced a partnership with Warner Music for the company’s mobile service and showed off the MOTORIZR Z6, a Linux-based music phone. Like Nokia did earlier this year, Motorola is pushing a music platform with both services and devices, and betting music will help sell its gear.
Kallasuvuo’s keynote was up second and on a slightly smaller stage at the Hilton, but filled with some sweeter devices. The company has been focusing on converged devices and recasting its phones as multimedia mobile computers for awhile, and today showed more of this plan. Kallasuvuo displayed the N93i video phone, an upgrade to the N93 we’ve been playing with, but the new one has Six Apart’s blogging service Vox integrated. Kallasuvuo said on mobile blogging and Web 2.0, “It’s the mobile device that will become the main way for people to participate in those communities.”
Kallasuvuo also showed off the N76, an eye candy slim phone, which he called “truly beautiful,” and the next version of its Wi-Fi-based Internet tablet the N800, which we can’t wait to check out. He mentioned that Nokia and Skype will develop a mobile Skype experience over the N800. He also showed a near-field communication mobile payment phone, the 6131, which Nokia is using in trials in New York. Whew – that’s quite a line up.
The companies are both hoping that all the flashy new phones and services announced this morning will help bring them the pickup they’ve been needing. Last week Motorola said its fourth quarter sales and earnings would be lower than it had previously forecast after slower sales of phones. That sent Moto’s shares down the most in more than four years (according to Bloomberg) and took Nokia stock in its down draft. Nokia’s third quarter earnings fell a bit while its sales rose, partly due to a drop in average phones prices, from a growing demand for cheap phones in countries like India.
Don’t get me wrong, sales of mobile phones are growing every year, and totaled 251 million units sold in the third quarter of 2006, according to Gartner — that’s a 21.5 percent increase from the same period last year. But the companies are in a bit of a bind. Matured mobile markets like many European countries, Japan and Korea and the U.S. are mostly buying replacement phones — a harder place to get growth. Emerging mobile markets like India and China are buying up phones quickly but it’s largely low cost handsets.
It’s a squeeze that the companies hope can partly be overcome by fancy handsets with features for music, the web, and video, among other things, that will convince consumers who already own a phone to get a new one. That’s one of the reasons why we get all these nifty new phones and services at CES every year.