Despite protestations that there is no price war, it's becoming increasingly obvious that Nokia is winning it.
The company has just released its results for Q4 2006 and both volume sales and profit margins were up. Its operating margins for its Mobile Phones business improved from to 17.1 per cent from 17.1 per cent. Compare that with Motorola's 4.4 per cent.
Nokia's CEO, Olli-Pekka Kallasvuo, told the FT that, "Our latest results are an illustration that if there was a price war, we were not participating."
Funny, then, that Mobile magazine has just reported that in the UK Nokia has just cut the prices on 43 different handsets and the typical reduction is around 10 per cent.
A source told Mobile, "In the eight years I have been working with Nokia, I have never known them to drop the price on much more than ten handsets at a time."
Sound like the action of a vendor involved in a price war, doesn't it?
Nokia's figures for the emerging markets show that its strategy is paying off. It is competing hard at the low end and enjoying upgrades to its latest products as a result.
So where is Nokia going wrong? Only in North America, it appears.
According to Martin Garner at Ovum, Nokia has "suffered a sales decline in the US, where its portfolio is not right and where its retreat from CDMA has reduced volumes."
Garner blames part of this 'portfolio' problem on the lack of acceptance for its smartphones - the N70, the N73 and the N91.
That's despite the fact that the company claims the total market for smartphones in 2006 was 80 million units in 2006 and that it shipped half of them.
So what's Nokia going to do? It's going to "launch of phones based on its Thin platform", according to Ovum. Thin, eh? Would that be razor thin, perhaps?
Anyway, Nokia says it isn't scared by Apple's iPhone. Indeed Kallasvuo welcomed it as "stimulating" the market.
Significantly in his advice to Nokia on what to do next, Garner says, "Finding some adequate resolution with Qualcomm on royalties" Might not be a bad idea.
He's right. Anything that could drive 3G chipset volumes up and prices down
would benefit the market as a whole.
While cases of overcharging for mobile phone users make the news, undercharging gets swept under the carpet. Yet network operators are losing a major chunk of their revenue.
According to Philip Sharpe, CEO with mobile billing experts – Cape Technologies, "Operators are undercharging their subscribers are lot more than they're overcharging."
Sharpe's colleague, general manager for EMEA, Emmanuel Doubinsky, estimated that as much as one to two per cent of traffic fails to get billed for. That sounds small but it could have a major impact on profits if recovered.
Naturally Cape is willing to sell its services to help operators recover that lost revenue. But Cape is also beginning to help out the content providers too.
Sharpe claims that some operators simply don't have the mechanisms in place to prove they're paying content providers the right money.
So content providers have to take their word for it that the network has sold X amount of ring tones. Unless they exercise their options for an audit. Which is where Cape comes in, of course.
It might well be worthwhile for some content providers to demand an audit. That's because operators are suffering from what is termed 'revenue' leakage, according to mobile payment specialist, Valista.
Evanna Kearins from Valista told Mobile Insight that some mobile users – particularly those in France – are getting very savvy as to how mobile operators' billing systems work.
So, for example, they're downloading content – such as a ring tone – and then immediately turning their phones off. After about 12 hours the network stops trying to send the premium rate message which acts as payment for the ring tone.
Consequently then the handset is powered up again – hey presto – there's no premium SMS so the user has effectively downloaded the ring tone for free.
Each ring tone doesn't amount too much but over time it can add up to substantial amounts over time.
Crucially, as Kearins pointed out, in this case it is the content who
effectively is missing out, not the mobile operator. If more subscribers get wise to such tricks, then the content industry will be forced to sit up and take notice. And guess who will benefit? Valista and Cape, naturally.
Bluetooth specialist, CSR, has joined with Acoustic Technologies to allow the latter's SoundClear technology to run on its designing BlueCore Multimedia based products.
That means that handset, headsets and hands-free system vendors can now integrate advanced noise cancellation and enhanced speech intelligibility into Bluetooth-based devices.
With the recent announcement that drivers in the UK will soon have penalty points added to their licence if they are caught holding a handset while driving, clear speech reception is becoming increasingly important for Bluetooth headsets. This is especially true if the driver is in a noisy cab.
CSR's single-chip offerings are based on its high-performance Kalimba DSP coprocessor. This enables third party enhancements like SoundClear to maintain very low power consumption and high audio quality for both speech and music.
Acoustic's ATS6000MM SoundClear technology uses two microphones to eliminate noise and improve sound quality. The software automatically adjusts its calculations according to environmental conditions, the speaker's voice and the quality of the line connection.
Proof that you can build intelligent apps that will run on a wide range of handsets not just smartphones comes from Brit upstart – Masabi. The company has just sold its 'engine' technology to games giant, Playtech.
What Masabi allows Playtech to do is roll out a range of games including Black Jack, Poker and Roulette onto a wide range of handset types – not just those running Symbian or Windows Mobile 5.0. The engine encompasses low end handsets which can run basic Java apps, too.
Essentially Masabi has given Playtech all the rights to its technology for creating any mobile games or mobile gambling apps. Playtech, in turn, sells the resulting games to its impressive list of online gambling and casino customers.
According to Masabi CTO, Tom Godber, his company's 'build engine' means that the client can create a mobile app – such as a game – and then press a button. Out of the other end comes versions of the app that can run on at least 50 different types of mobile phone. Including low end models, naturally.
A crucial part of Masabi's technology is that it incorporates high level security so that it can be used for secure financial transactions.
In Playtech's case, this means taking bets and paying out winnings. But the technology has applications in plenty of other market niches.
Godber suggested, for example, that charities might be interested in the technology since it allows a 'Donate' button to be added to a wide range of mobile apps.
Avid Mobile Insight readers will remember Masabi from its mobile viral offering Pick the Prez. Collective amnesia prevents us from naming its first ever mobile app.
British MPs from
both leading parties have widely
condemned a TV quiz show. Labour MP,
Paul Farrelly, described shows such
as ITV's Quizmania as "tantamount to
theft and fraud." The TV quiz was
virtually unwinnable he said,
causing viewers to waste their money
by competing.
A report is expected to demand
greater consumer protection that
regulator, Ofcom, currently
provides.
Talking to The Mail on Sunday,
John Whittingdale, a Tory MP who
chairs the Commons, Culture, Media
and Sport committee, said this
report will be published this
Thursday (25th January).
"We will be recommending changes
in areas where we think greater
consumer protection is needed,"
Whittingdale said.
The body which protects consumers
from these quiz show is the same
one, Ofcom, which overseas text
message and telephony services.
It's reported that ITV, which
aired the TV quiz show, is expected
to make £20 million profit in a year
from its quiz show division. Yet
Ofcom and its enforcer, ICSTIS, levy
only puny fines on offenders.
One Mobile Insight reader is struggling to
reclaim £21.50 extracted from his
son's mobile phone by a 'Text to
Win' competition provider. (see .
Provided by ICSTIS with only a
premium rate number to complain to
the competition provider, our reader
phoned the company's sales office
and demanded to be put through.
He was told his son must have
played the quiz via WAP (since
there's no trace of any text message
traffic).
This is very strange since at the
time, his son hadn't managed to
configure the phone to work with WAP
on the Orange network.
Complaining again to ICSTIS, our
reader was told, "We can't get your
money back for you. Only pursue the
complaint against the service
provider." Seems like exactly the sort of
"theft and fraud" which applied to
the Quiz show. What Ofcom needs is
bigger teeth to combat the
fraudsters and ICSTIS the ability to
claw consumers' money back. The
latest mobile phone scam encourages the recipient to call a premium rate number
to retrieve a waiting message. The sender is totally unidentified and is using
an overseas telephone number. Don't ring.
Vodafone is expected to announce a formal bid for Indian mobile operator, Hutch (Hutchison Essar), at the 3GSM show in Barcelona next month.
Arun Sarin, Vodafone's CEO, told the Sunday Telegraph that, "Once we get the [due diligence] report … we'll be submitting a formal proposal. It will be sometime early next month."
Obviously with the 3GSM industry showcase commencing on 12th February in Barcelona, Vodafone can use the announcement to illustrate its overall strategy. Attacking the biggest of the emerging markets is one very logical ploy.
In order to acquire Hutchison's stake in Hutch, Vodafone will almost certainly need to lose its existing stake in rival Indian operator, Bharti. Hence the Sunday Telegraph reports that Vodafone has been in talks with Singapore's SingTel.
SingTel already owns over 30 per cent of Bharti, anyway. It's not clear how much sway Bharti itself has over where Vodafone's stake actually goes.
Separately, the newspaper reports that Virgin Mobile USA is considering floating itself. Especially now that the MVNO went into profit last year [2006].
This could have led to a very interesting situation, Stateswise. In the UK, GSM based Virgin Mobile has merged with cable operator, NTL. Part of the reason was to acquire the Virgin brand.
But NTL is already listed on NASDAQ. So we could have seen two Virgin Mobiles – one Brit and the other a joint venture with cdmaOne operator, Sprint.
So to make life a tad easier for US investors, NTL/Virgin will become Virgin
Media.
Taking matters into its own hands, UK mobile operator – O2 - has forced a reseller to pay up damages of £500,000 in a practice known as 'slamming'. This involves tricking consumers into signing for a mobile contract they don't actually want.
The UK regulator, Of com, has been criticised for sitting by and letting others take action over such matters.
A report in the Mail on Sunday claims that O2 has beaten reseller, Landmark Communications, by proving that it stole customers over to rival networks 3 and Orange.
O2 claims that Landmark claimed to represent it – the old "We're from 02 upgrades" ploy – while actually fooling consumers into signing a completely new contract with an entirely different operator.
Landmark Telecommunications is the parent company of Mobiles Direct (Mobiles on
the net) and is based in Llanelli. It's not the only incidence of 'slamming' to come to light recently. The Sunday Herald revealed how a young woman, Zoe Hughes, was tricked into giving away her financial details at a Phone4U store.
The salesperson explained it was necessary to 'check' whether she was creditworthy. Even though she didn't want it, Ms Hughes then found herself signed up to an O2
contract. It took her 32 months to wriggle out of the nightmare which followed whereby she was pursued relentlessly for a supposed 'mistake'.
A spokesperson for Ofcom, the telecoms regulator, told the newspaper, "If the issue is over the way an item was sold, a customer can go to his or her local Trading Standards office."
The body appears to be ducking the issue entirely. It claimed, rather lamely, that it has received "relatively few complaints about 'mistaken' sales".
One Mobile Insight reader who attempted to recover a 'cashback bonus' from a reseller found there was absolutely no proof the offer had been made and no-one at the reseller was prepared to take responsibility.
The reseller, however, had no qualms about employing a debt collection agency when the reader stopped paying.
Such incidents merely fuel criticism that the current regulator – Ofcom, and its predecessor, Oftel – are too close to the industry to take effective action.
Interesting omissions department. Mobile Insight has learnt that as
the iPhone doesn't support 3G, it won't be possible to download directly to the
handset from the iTunes store. Also, even though it supports WiFi - the handset
won't ship with a VoIP client. Please mail us if you know of any more holes in
the iPhone's makeup.
In Site of the Week (by Tony Dennis)
This week
BBC Three Mobile
Mobile Insight recently discovered that there is as a WAP site run by the
British broadcaster , the BBC, for its BBC3 channel - BBC3
Mobile site. What this site does is enable you to download video clips of
certain BBC programmes like Torchwood, Comedy Soup and (theoretically) some
episodes of the Sci-Fi hit, Dr Who. Anybody who wants to try BBC 3 Mobile out
should text the word 'THREE' to 81010. Or type the following URL into their WAP
browser :-
