Carriers Versus Handset Makers

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Slowly and surely, we are beginning to see a line in the sand been drawn between the carriers and the handset makers. A little ago I was chatting with AT&T Wireless chief technology officer Rod Nelson. Our conversation was about commoditization of the cell phone business. With six radio chipset makers, four operating systems companies, and half a dozen middle ware and processor makers, the barriers to entry in the wireless handset business have been lowered to such a level where anyone can get into the business. For carriers, this is good news. “Small companies will do whatever we want them to do,” says Nelson said. What was unsaid was that they were using this muscle to squeeze the big players like Nokia and Sony Ericsson.

Now the handset makers are striking back. Last month the deal announced between Motorola and ITunes/Apple was a sign that handset makers wanted to take some of the control and brand value away from the carriers. Today, thanks to an eagle eyed reader and my reality check, Charlie Sierra, I have come across this story about “Five of the world’s top mobile-phone manufacturers are joining forces on the delivery of TV broadcasts to handsets.” Open Mobile Alliance (OMA) which includes Motorola, Nokia, NEC, Siemens and Sony Ericsson is trying to make sure that standards for mobile video broadcasts are supported on their devices.

They are going to work with broadcasters, i.e. content providers and make delivery of stuff like CNN and Days of our Lives easier on the handsets. Being a suspicious sort, I think it is a way to get past the “walled garden we control everything” approach of the carriers. I think is going to become more of an issue going forward. If mobile television is easier to use, consumers want it, and if that happens, then well carriers will have loosen their grip a little bit. And perhaps the pendulum starts to swing in the opposite direction. My guess is that the current bone headed moves like crippling Bluetooth features and other such nefarious moves are going to alienate the carriers from their ultimate consumers. ( Hey if 50,000 Verizon subscribers who pay $50 a month for their service and are pissed off at its V710 trick decide to switch – now they can – that is about $2.5 million in lost revenue every month, or $30 million a year.)

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Venki Iyer


Can I have some of what you are smoking?

Serously, the OMA stuff, along with DVB-X (or whatever it is called these days) just provides a *STANDARD* mechanism/interface/API (take your pick) for content delivery to any manufacturers handset. Will manufacturers actually try to set up the direct business relationships w/ content providers? I don’t think so. Will moto or nokia or ericsson or samsung, for all of their handset biz, jeopardize their fairly lucrative RAN and CORE infrastructure businesses? NOT!

I agree with you about the long-term (10 years from now) though. Cable/DSL/mobile operators will turn into bit-pipe providers, and consumers will be able to get content/applications directly from providers. With voice being just another such app.

What does this long-term shift do for content? I think it finally makes them king, for all of a few days – if you think viewership is fragmented now, just wait for 10 years from now. You might actually be making money off your blog. :-)

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