Wireless industry faces painful epiphany

Smartphone manufacturers such as Nokia Corp., Palm Inc. and Research In Motion Ltd. are due for a nasty wake-up call, according to one industry analyst. Tony Rizzo from The 451 Group figures companies should prepare by consolidating their mobile assets."Put the BlackBerry up against the Moto Q," says the director of mobile research from his New York office. "Put it up against the Nokia E61. Field test them, and then pick and choose the devices you're going to want to support."Simplification will rule the day when smartphone makers are hit with the realization that the global enterprise mobile-device market is smaller than they thought, and certainly not large enough to support as many vendors as there are today."A lot of the vendors...say there's a 600 million-user market out there," Rizzo explains. "Well, yes, there's a 600 million market of total potential users. But 50% of them are probably never going to use those services. Right away the market is cut in half."Using RIM's BlackBerry as an example, Rizzo says the enterprise wireless sector is actually quite small."How many of these 300 million remaining users are at a level where they travel and need a device like a BlackBerry? All of a sudden you're down to 40 million."Rizzo also sees a disturbing picture forming on the consumer side, which could hurt the prospects of mobile email platform providers such as Visto Corp. and Good Technology, which Motorola Inc. acquired earlier this year."The way the world is evolving, a lot of consumers don't use email on their phones," Rizzo says. They use instant messaging or SMS....How many need mobile office capability?"He points to Montreal-based OZ Communications Inc. as one of the consumer-market disrupters."OZ specializes in providing interfaces to all of the public email accounts - Gmail, Hotmail, Yahoo Mail, et cetera. That's basically a free service. If I can access my Gmail account and it's all I need, why would I spend money on Visto or Good? The market is even more drastically reduced for these guys."Wireless advancementsRizzo's comments follow a flurry of activity in the wireless device industry. In May, RIM CEO Jim Balsillie reportedly told financial analysts that the BlackBerry would soon sport both Wi-Fi and traditional WAN radios for fixed-mobile convergence (FMC) - a concept that would allow users to jump from one kind of wireless network to another without losing their sessions. It's another indication that FMC is no pipe dream, although no one seems quite sure how the market will manifest (see "Clearing up fixed-mobile confusion").Also in May, Rogers Communications Inc. announced that its wireless arm would offer High Tech Computer Corp.'s (HTC) TyTN. With Microsoft Corp.'s Windows Mobile operating system, HSDPA connectivity, a slide-out QWERTY keypad and an LCD touch screen, the smartphone is described as a pocket office. It supports Rogers' drive to become a tour de force in the business market.Finally, Palm unveiled the Foleo, a companion for the Treo smartphone. Shaped like an ultra-mobile PC, it's designed for editing email and office documents stored on the Treo. It includes on-board email capabilities, a Web browser and programs for viewing Word, Excel, PowerPoint and PDF files. It synchs with the accompanying Treo via Bluetooth, so changes made on the Foleo are mirrored on the smartphone. A built-in Wi-Fi radio provides Internet access at hotspots.But despite these announcements, not all of the players will survive, Rizzo says. In his opinion, the Foleo won't save Palm."It's a pretty dumb idea," he says. It's predicated on a misconception "that users are so email crazy that they'll want to carry this additional three-pound device in addition to their smartphone....In the enterprise world, everyone has a laptop. No one's going to have a third device."Palm couldn't be reached for comment. News reports say the company laid off 1,200 employees earlier this month.Others disagree with Rizzo, however. San Jose-based analyst Rob Enderle described the Foleo as a potential game-changer: down the road, mobile-device users wouldn't necessarily be confined to bulky smartphones; they could use a Foleo for smartphone features and carry a smaller phone for day-to-day toting.It's part and parcel of "modular computing," he said online, whereby components of the mobile experience can be mixed and matched, combined and disconnected depending on the user's needs. "Foleo could be bigger than you think, and if it evolves like it could, it very well might change the future of personal computing."Asked about the most prominent Canadian player - Waterloo ON-based RIM - Rizzo says the company makes good products. But "there's very little room for mistakes. What happens if RIM puts out a product that isn't accepted by the public? Can RIM survive something like that?"It all adds up to a consolidating sector, Rizzo says. Business communications managers should batten down the hatches. "Start to put devices through their paces and standardize."

Wireless industry faces painful epiphany

News | 06/22/2007 1:36 pm EDT

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