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Hardware matters

Submitted by Metrocode on February 4, 2007 - 7:20pm.
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Greetings from the Silicon Valley...LK of team metroCode here, having just attended a conference entitled "Mobile Persuasion" (www.mobilepersuasion.org), hosted by Stanford's Perusasive Technologies Lab. I took copious notes and will blog on the proceedings in upcoming entries. In the meantime, it's worth mentioning that many of the challenges and barriers we at Mobile MUSE face are not dissimilar to those encountered by companies in the mobile space in the Bay Area. The carriers/barriers issues, the unearthing of design principles specific to mobile, strategies for leveraging and monetizing the new habits and behaviours spurred by mobile device penetration. 

But first...in the 'call and response' tradition (which just happens to be an interesting cell phone metaphor, but that's just a charming coincidence) I'm posting the following as a companion piece to Igor's insightful post about software matters.  Food for thought re moving away from the 'bundle' approach which provides consumers with a low cost or free device but at the same time limits/inhibits the individual's activities and places constraints on developers and content creators.



'Dell-style' phones to challenge mobile operators

02 February 2007

Mobile operators' control over subscribers will increasingly come under threat as handset manufacturers move towards a "Dell-style" approach, where users specify the features and software they want on their devices, according to Norwegian VoIP provider, Telio.

"People know that subsidies don't come for free," Alan Duric, CEO of Telio told delegates at Informa Telecoms&Media's Mobile Converged Devices conference in London. "So they'd rather buy a phone that costs £100 and choose the operator that suits them best."

Informa owns Telecoms.com.

Around 40 per cent of Telio's mobile customers buy their handsets independently of an operator subscription, he claimed. This trend is likely to grow as people demand features such as voice-over-wifi, which mobile operators may try to lock out.

Handset manufacturers, meanwhile, are keen to serve these people's needs. "[Handset developers] pick up what's best in the market, and if it doesn't exist, they make it themselves until it becomes commoditised, and then they pick something else that's missing [and develop it]," said Duric, describing the logic as similar to Dell's computer-assembly process.

Handset manufacturer Motorola confirmed Duric's position, predicting that the number of mobile phones sold directly to retailers or through an operator intermediary, rather than through operators, is going to increase "enormously".

"The flexibility around the [handset] propositions that we're offering needs to increase proportionally, because I think that's where the innovation is going to come from," said Alan Wright, head of strategy and new-business development at Motorola.

This story first appeared in Telecoms.com's sister publication, 'Telecom Markets' on 30 January.