Subject: [NEXTEL-1] Why Aren't We Going Wireless?

From: Marcel <[email-masked]>
Date: Wed, 15 Jan 2003 16:23:13 -0500

Why Aren't We Going Wireless?

Handsets that double as digital cameras and PDAs are a step in the right direction, but we
want more, experts say.
James Niccolai, IDG News Service
Wednesday, January 15, 2003

LAS VEGAS -- The mobile phone industry is looking for ways to make wireless data services
more attractive to businesses and consumers, but a lack of useful applications and other
obstacles are making their goal harder to achieve, a panel of industry executives said
here last week.
Offering businesses applications that make workers more productive is critical for driving
wireless data use, said an executive with Nextel Communications, which serves mostly
enterprise customers. That means approaching them with partners such as IBM and offering
products that solve specific problems, according to Tim Donahue, Nextel's president and
chief executive officer.
"You're going to make money from applications that make corporations more productive," he
said.
Useful Tools
An example is phones that have global positioning systems. Those phones can help companies
keep track of delivery teams and be used to send them work orders using both voice and
data, he said.
On the consumer side, phones that can send photographs and text messages or be used to
download and play games are a step in the right direction, the panelists said, though it's
unclear yet how popular those applications will be, especially in the U.S. where such
services are relatively novel.
So-called "push to talk" services, which allow users to talk to colleagues by pressing a
button on the phone as if it were a "walkie-talkie," will be another big driver, a few
panelists said. Nextel offers the capability to business customers with its DirectConnect
service, but the feature will also be popular among young people, according to Philip
Christopher, president and chief executive officer of Audiovox Communications.
Working Together
The executives spoke Friday on a panel at the Consumer Electronics Show which looked at
the state of the wireless services industry.
Len Lauer, president of Sprint's PCS Division, said customers want the ability to roam
freely between cellular networks and wireless LANs depending on which is available and
best suited to their needs at the time. Along with other carriers, Sprint is looking for a
way to provide customers with a single bill that will cover their monthly usage of both
types of networks, he said.
On the handset side, Kyocera Wireless has shifted 500 engineers into its consumer group
from other parts of the company. Customers want a wider range of handsets and combination
phone-PDAs to choose from, said Skip Speaks, Kyocera's president and chief executive
officer.
Price Points
The executives seemed to agree on one key issue: They can't afford to compete on price
alone for much longer. Profit margins are thin for both handset makers and services
providers, they said, and the industry needs to come up with a business model that allows
them to compete on features and value instead of pricing.
"I saw a sign the other day offering for five phones for free. I promise you, they were
not free," Kyocera's Speaks said.
Panel moderator Andrew Seybold, president of Andrew Seybold's Outlook 4Mobility, wasn't
sure they would find a different model quickly enough to avoid dramatic consolidation.
Among his predictions for the year: BellSouth will buy Sprint PCS, and the U.K.'s Vodafone
Group will pull out of a U.S. venture with Verizon Communications and partner instead with
AT&T Wireless.
Sprint's Lauer said his company is doing fine and isn't for sale. Verizon wasn't on the
panel to defend itself.
Setting the Standard
Perhaps the biggest obstacle to the growth of wireless data services is the lack of
interoperability among the various carrier networks, according to Mike Lazaridis,
president and co-chief executive officer of Research In Motion. He said RIM still has
trouble sending SMS messages from one carrier's network to the next.
Philip Christopher, president and chief executive of Audiovox, agreed. His company has to
make a slightly different phone for the networks operated by Sprint, Verizon, and AT&T
because they all use different software for their networks, he said. This increases
development costs.
Some requirements imposed on the wireless industry by the U.S. government are unjustified
and waste money that could be invested elsewhere, Nextel's Donahue said. For example, a
requirement that operators support "e911" calls by 2005 will cost the industry thousands
of millions of dollars, he said. He called e911 a worthwhile initiative but argued that
emergency services don't have the capabilities yet to receive such calls.

http://www.pcworld.com/resource/printable/article/0,aid,108806,00.asp

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