Spiral Arm News

Nokia and Microsoft deal on music and synchronization.

At 3GSM, Nokia announced that its handsets will play Microsoft's Windows Media format music, by converting them to the AAC format. Nokia also announced their licensing of Microsoft's ActiveSync technology. Nokia handsets will continue to use the Symbian operating system, rather than Microsoft's, and the deal may perhaps hinder the development of Microsoft-specific devices.

The Guardian: "Some delegates in Cannes believe that allowing Nokia phones to synch seamlessly with Microsoft's email products is a quid pro quo for allowing Microsoft's music technology to work with the latest Nokia handsets."

The Register: "More significantly for enterprise users, Nokia will license Microsoft's ActiveSync software. This didn't lessen Nokia's commitment to SyncML [...] Nokia had lobbied hard for Microsoft to open its communications protocols through the EU. Now it's a licensee, the ActiveSync agreement removes a major motivation for businesses choosing Microsoft smartphones."

Use the network for handset backups.

A study reported in
Computing highlights our growing dependence on mobile technology. The survey found over 50% of UK mobile users do not maintain a separate address book, and 20% rely solely on their mobile for a record of phone numbers. Not surprisingly, one in three worry that would lose contact if they lost their phone.

"The network is the stable partner in a mobile relationship, not the handset. If the network can act as an address book and mirror those important details, then we might really be able to help the UK 'keep on talking' and resolve the annoyances of lost phones and handset upgrades."

Towards 2bn connections with cheap mobiles.

The FT (14 Feb 2004, p. 9) reports that Motorola, in conjunction with the GSM Association, has developed a sub-US$40 handset. The project was started by nine mainly Asian operators and has a target of 6m handset sales in six months.

"The GSMA [...] estimates that the C117 will open mobile phone ownership to more than 700m new customers in Asia, Latin America, the Middle East and Africa if it can ultimately bring the price below US$30".

The next steps are to address the tax on imports of mobile phones in some countries. As mobiles are seen as luxury goods, the taxes are often high.

Economist report asks if Nokia can stay on top.

The special report, "Nokia's Turnaround", was published in The Economist on 12 Feb 2005. It notes that Nokia is:

• the largest telecoms equipment vendor (revenues of US$36b);


• the manufacturer of 200m of the 650m mobile phones sold last year;


• arguably the world's leading computer maker, based on the above figures; and


• arguably the world's leading camera maker.

Nokia's market share fell from 35% to 28.9% last year. To recover "they are going to have to pull some fantastic products out of the hat" at the 3GSM conference.

The source of the problems:

• Failure to anticipate the popularity of clamshell handsets. Despite being on of the first to recognize mobile phones as fashion accessories, critics claim Nokia has lost its design edge to Motorola, Sony Ericsson, Samsung and LG.


• Failure to supply operator-specified custom handsets. Nokia has the strongest brand and therefore the most to loose when operators try to increase their customer loyalty with custom (and locked) handsets. "In Europe, where switching between operators is easy, most consumers are more loyal to handset-makers". Other manufacturers were happy to work with the operators.


• Disruption due to internal reorganization at the end of 2003, "creating separate units for mass-market, business and multimedia phones. The made sense strategically, but the reshuffle caused Nokia to take its eye off the ball".

Nokia's response:

• Cutting prices.


• Portfolio change, removing some phones and bringing forward the launch of new handsets. "Two handsets in particular, the low-end Nokia 1100 for emerging markets and the Nokia 6230 mid-range camera phone, emerged as "hero products" during 2004 [...] the later model, a monoblock design, was so popular that Nokia was at times unable to meet demand. Clearly, a clamshell design is not a prerequisite for success".


• Start to make customized handsets for operators. Nokia say their reluctance to customize is due to logistics issues with their supply change. They prefer to customize in software at the last minute, rather than touch their volume production line. However, there will be hardware customization "where volumes justify it".

The challenges ahead:

• Increasing volatility: competition from Japan, South Korea and Taiwan. "Samsung and Motorola are locked in a fierce battle for the industry's number two position. Siemens, the unprofitable number four, seems poised to leave the industry...". This competition shortens the life-span of models, meaning there's less time to exploit volume production.


• Research and development: Nokia builds its own radio chips, so claim that more complex handsets favour them. However, Nokia were very late with 3G handsets compared to rivals who outsource component design. In reply Nokia say it's better to be right than first to market.


• Growth: Nokia are doing well selling volume to developing markets. For more mature markets they are expected to come up with ideas for new features.


• Phones for business users: "We think it's probably the single largest untapped market for Nokia", says enterprise solutions chief Mary McDowell.


• Consumer multimedia: The N-Gage has sold poorly; it's unclear how well DVB-H mobile TV will be received; and there's no music-specific phone. "Watch this space, Nokia executives reply".

Nokia and field service: server software, GPRS, RFID tags and handsets.

Using a Nokia RFID-enabled handset (there are three to choose from), a field service engineer would touch the RFID tag on, say, a gas meter, and the information read will be sent via a text message or over GPRS to the "Nokia Interactions Server". From there it can be tied in to back-end systems such as databases or scheduling services.
That's the vision, as presented in a Computer Weekly report.

The LI (local interactions) server is a Java-based service, with a web interface, designed to be the glue between the mobile network and enterprise systems. There's a component that runs on the handset, which is how the LI server acts as a gateway from the business to individual handsets. Nokia license the software as a hosted service (ASP) or it can be run in-house.

More details are available at the Nokia field force solutions site.

O2 announce messaging, video, push-to-talk and presence.

These services are to be offered within two years, according do
Computer Weekly. The presence facility will allow users to see who is active (or busy) on the network before deciding how to contact them. For example, if you see someone is "in a meeting" you may decide to send them a text message, rather than call.

In addition, the O2 infrastructure upgrade to IMS (IP Multimedia Subsystem) will support single sign-on and 3.6mbps 3G speeds.

The O2 press release also mentions the integration of DoCoMo internet services and mobile TV.

FT on mobile working: "mobile phones are simply too convenient".

The Financial Times IT review of mobile working (part I, Jan 26 2005) made a number of interesting observations:

• 3G will bring call costs down, but with 44% of European businesses using a mobile as their primary business number, call costs are an issue today. "Many calls made in the office are made on a mobile phone -- even to colleagues who could be reached free on the internal phone system -- because the mobile is the device of choice for many people" (p. 4). In our opinion, it's not just the convenience of making a call from a mobile (via your address book), but also calling to a mobile is preferable. Why, generally, would you want to call a fixed location when you have the option to call a person? Rather than try to reduce this behaviour, it's good to see technological solutions being advanced, such as mobile/fixed hybrids and VoIP.



• The FT remind us that mobile email isn't limited to Blackberry or similar devices. Many GPRS enabled or 3G handsets can send and receive email. The problem with these solutions is that the handset user has to go through the pain of setting the device up.



• Webcor, a US construction company, has been using Palm-based PDAs for access to corporate applications and email. They've now gone a step further and switched to Treo smartphones, replacing laptops, PDAs and phones with a single device. What's interesting about this case study is that in evaluating solutions tablet PCs were rejected: Their size meant that "...they blocked the view of their [the workers'] feet, so they might walk into a trench or whack their heads."