Byline: Cynthia L. Webb
A big wireless phone industry conclave in Europe this week will undoubtedly feature multiple announcements of new cell phone gadgets and services, but it will also provide a unique opportunity to take the pulse of an industry that's aiming to serve up much more than plain old voice services to customers.
Case in point is Eastman Kodak Co. , a former blue-chip firm who saw its dominance of the photography market overturned by the advent of cheap digital imaging products. So the old-fashioned company is trying to tap into the lucrative wireless phone market by partnering with providers to offer an online photo service. The Associated Press put it bluntly that Kodak's latest digital picture strategy comes "as it scrambles to make the transition from celluloid to digital technology."
Kodak is expected to formally announce the cell phone photo service today at the 3GSM World Congress meeting in Cannes, France, The AP reported. "Starting in May, owners of a new wave of higher resolution camera phones should be able to upload their pictures and videos to a central server, send them by e-mail or print them via wireless infrared or Bluetooth links at Kodak kiosks," The AP reported, noting that Kodak has a deal with Nokia to make phones that work with the Kodak kiosks and also is in talks with Vodafone , T-Mobile and France Telecom 's Orange for more deals. * The Associated Press via washingtonpost.com: Kodak Starting Cell Phone Photo Service (Registration required)
Kodak is hitching its wagon to a wireless industry that's desperate to offer more services and features to a market that's increasingly saturated. "Signs that new [cell] services may lead to increased revenue are helping restore some of the investor confidence shattered after companies spent more than $100 billion on mobile phone permits in 2000, which led to record losses and debt," Bloomberg reported. "As the prospect of gaining clients diminishes, operators are rolling out data services, such as games or the ability to download information from the Internet with handsets, to fuel growth."
Another area that is expected to fuel growth is expanded data service, which is expected to be buoyed by 3G (short for third-generation wireless technology), the Bloomberg article indicated. "Mobile phone operators in European countries including Germany, Spain and Portugal have pledged to start the new services, which will even allow users to hold videoconferences, this year. The third generation, or 3G, is based on the Universal Mobile Telecommunications System , or UMTS, and allows handsets to transfer more data at a faster speed. Vodafone and Telefonica Moviles this month started selling a 3G data-card service that allows customers to access the Internet with their portable computers over wireless connections at speeds as much as 10 times the rates previously available." * Bloomberg via The Los Angeles Times: Telecoms Bet on New Services To Boost Sales (Registration required)
The International Herald Tribune picked up on the same theme in an interesting report on British mobile phone tycoon John Caudwell , who is offering a less-than-bullish forecast for the overall industry. Caudwell "recognizes that, with mobile phone use rates in western Europe at between 70 percent to 90 percent of the population, such astonishing growth rates are unlikely to be repeated over the next 15 years. ... Even the advent of so-called third-generation mobile phones and services, which Caudwell expects to give a brief lift to phone sales in the next few years, will not be sufficient to avert what he predicts will be a painful consolidation of the industry." * International Herald Tribune: Cellphone Tycoon Is Cautious about the Industry's Future
The Future Is 3G
A lot of wireless news will flow out of the big 3G gathering in Cannes this week. Here's a fresh announcement, for starters: France Telecom's "Orange ... said it would offer third generation mobile telecommunications services to the general public in France and Britain in the second half of the year," AFP wire service reported. The article gave a good, short primer on so-called "Universal Mobile Telecommunications Systems. "UMTS, also known as third generation or 3G telecommunications, is designed to provide e-mail, high-speed Internet surfing and live sound and image broadcasts to compatible handsets," the article said. * AFP via Yahoo! News: France Telecom Wireless Unit Orange To Launch 3G Mobile Communications
A preview article in CNET's News.com on Friday reached the not-so-surprising conclusion that the United States is behind the curve on 3G technology, trailing Europe and Japan. "After five years of famously slow progress, third-generation (3G) networks using standards with cumbersome names like UMTS or w-CDMA are now available throughout the United Kingdom, Germany, Austria, Japan and Korea. Carriers such as T-Mobile or 3 in Europe and NTT DoCoMo in Japan are using the technology, which operates 50 times faster than present-day cell phone networks, to boost network capacity, improve coverage areas and to offer new services including 2.4 megabit per second wireless broadband," the article said. Carriers in the United States had the lead over their European and Japanese rivals for a relatively brief period of time in late 2002 and early 2003. But their trials of 3G technology haven't progressed yet to commercial releases, mainly because their attention strayed to more pressing issues such as the November 2003 deadline to let subscribers keep their telephone numbers when switching carriers. The U.S. carrier now closest to launching a widespread commercial 3G service in the United States is Verizon Wireless , which believes it will have a network providing average user speeds of 300 to 500 kilobits per second this summer. That service is currently available in Washington, D.C., and San Diego." * CNET's News.com: For the U.S., A 3G Wake Up Call In Cannes
[If you missed Anthony Faiola's recent report for The Washington Post on the state of the wireless phone in Japan, read it now . Excerpt: "Technologies considered experimental or novel in the United States have already gone mainstream [in Japan], giving rise to an unparalleled cell phone culture. Today, Japan offers a fascinating glimpse into a possible future for Americans: life in a wireless world through the cell phone."]
But even as Europe has rushed ahead to embrace 3G, Reuters reported there's a shortage of handsets capable of supporting the new standard. "Analysts are worried there will not be enough quality video, picture and Internet data phones available for the mass market before early 2005," Reuters reported. "'We are going to be nailing the manufacturers to demand 3G handsets now,' said one of Europe's top mobile phone operators." * Reuters: Mobile Operators To Shop In Cannes For 3G Build-Up
A Bargain Cell Phone Market?
Stelios Haji-Ioannou , founder of European discount airline service EasyJet , has set his eyes on the wireless phone market, "planning to apply to the cellphone industry the same strategies that have made discount airlines like his so competitive and profitable, with the promise of cutting mobile phone bills in Europe as much as 50 percent," The International Herald Tribune reported.
More from the IHT: Haji-Ioannou "is not the first to believe that it is possible to take the same cost-saving approach to two different industries. Virgin Mobile , part of the Virgin Group, which owns part of Virgin Air, offers low-rate mobile phone service in Britain and is looking to expand onto the Continent. And on March 1, Ryanair Telecom , the telecommunications spinoff of Ryanair, EasyJet's main discount airline competitor in Europe, plans to introduce a similar mobile service. The idea is to use a no-frills business model - like the one used to undercut the traditional airlines that did away with large numbers of staff and infrastructure - to offer low-cost mobile phone calls. The low-cost providers entering the market are known as mobile virtual network operators. Unlike traditional mobile carriers, which are burdened with license fees and infrastructure costs, the virtual network operators buy capacity from existing operators and use the Internet as their sole distribution and sales channel, allowing them to avoid the huge costs connected with running a network." * The International Herald Tribune via nytimes.com: Taking an Idea From Airlines -- No-Frills Cell Service in Europe (Registration required)
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