Subject: [NEXTEL-1] Is Nokia making its biggest gamble yet?

From: marcel_rf1 <[email-masked]>
Date: Fri, 02 Apr 2004 18:13:06 -0000

http://www.silicon.com/networks/mobile/0,39024665,39119735,00.htm 

Is Nokia making its biggest gamble yet?
Jo Best
silicon.com
April 01, 2004 
Remember the advent of text messaging, when mobile companies wanted 
to cut off their nose to spite their (multi-billion pound) face – and 
put the mockers on network-to-network chat? Well, it looks like those 
self-same companies could well be heading down the same road with 
push-to-talk. 

PTT has been getting the mobile operators slavering – IMS Research 
believes it'll be a $50bn industry by 2008 for services alone – but 
the handset makers may well be about to throw a spanner in the works. 

For push-to-talk to work, all handsets need to be interoperable. You 
can chat with one or many people instantaneously but all your desired 
messagees need to have a handset that can receive the messages – like 
text – even if they use a different network. Interoperability is good 
news for consumers with network-dispersed mates or business contacts 
and it's good news for operators – more communication means more 
cash. So far, so logical. 

With PTT, however, not all the handset manufacturers are thinking the 
same way. The Open Mobile Alliance (OMA) is dreaming up a standard 
for PoC (Push-to-talk over cellular), scheduled to hit the vendors at 
the end of this year. 

Nokia, however, doesn't fancy the wait much and is letting the rest 
get on with it, while making its own PTT-functional handsets and 
proprietary standard. Understandable, when all-powerful operators 
such as Orange are keen to follow the US example and get the 
technology into the hands of users as soon as possible. 

The wrangling over the PoC standard, depending on your perspective, 
is either the shot in the arm that PTT needs or just bloody-
mindedness that hampers adoption and will dampen consumers' 
enthusiasm. 

Ericsson's senior marketing manager, Niklas Medman, said that 
interoperability is still the dream for all operators, even if Nokia 
is proving a little slow to get on the bandwagon. "There is no other 
mullti-vendor standard," he said. "The industry is saying there's 
only one standard – PoC – and that's where we want to end up 
eventually... There are different approaches at the moment. That's 
not atypical to see when new services are rolled out. Everyone agrees 
there's only one endgame... and that's PoC." 

Fellow handset maker Siemens takes very much the same tack. Speaking 
at the Push-to-talk world summit this week, Christoph Aktas, from 
Siemens mobile divsion, said "For PTT to be widely available and 
successful, the required functionality needs to be built into a wide 
range of mobile devices... If we don't have interoperability, then 
we're fooling ourselves the market will ever pick up." 

And with Nokia currently holding a 35 per cent share of the mobile 
market as a whole, no one would deny they're worth having on board. 
But surely, where Nokia lead, handset buyers follow and the world's 
number one in Europe leading from the front can be no bad thing. The 
manufacturer has said when the standard makes it to completion its 
phones will all be compatible with the PoC standard and remains part 
of the OMA. 

Nevertheless, Nokia's stance hasn't gone down well with everyone, 
with some other manufacturers viewing it as the bigger kid throwing 
its weight around. Mark Boulding, analyst at Quocirca, thinks the 
strategy risks backfiring on the mobile maker. 

"It will accelerate take-up by giving consumers the opportunity to 
invest in PTT earlier. It could go one of two ways for Nokia though – 
either it accelerates the market for them or operators boycott them 
and say 'we're not prepared to play by your terms', and they may lose 
out not only on handset by on infrastructure play too," he said. 

Jeremy Green, analyst at Ovum, said Nokia isn't playing dirty, it's 
just like all the other operators in the sector. "Given that the 
standard isn't finalised yet, everyone's offering is proprietary. 
Everyone else is going after market share, why shouldn't Nokia?" He 
added that the operators will still be shy of the changes of ending 
up with one maker. "Standards wars don't do anyone any good... 
Operators won't want to get locked into a limited range of handsets." 

In the US, PTT has made its mark mostly as business service. It's a 
market that may be able to dodge the question of standards – after 
all, chances are all employees in one business will be on the same 
network. In Europe, however, the big money looks to be with consumers 
and where will PTT be if teenagers can't chat with their mates? 
Neither use nor ornament, it would seem. 

To return to the text analogy, the future of PTT may be squarely in 
the hands of the consumer. One of the key drivers for text 
interoperability was consumers' annoyance, coupled with vendors 
realisation that sharing would only be good news for their bank 
balances. 

So will PTT follow the SMS path? It remains to be seen. John Devlin, 
wireless communications group analyst for IMS Research, said that the 
issue of interoperability was a question that needs to be resolved by 
the industry: "The final decision rests with the operators on how far 
and how quickly they allow it to take place," he said. 

And while operators and manufacturers alike continue to lick their 
lips over the big fat cash piles that they expect to see, the 
phrase "premium toy" surfaces with regularity. With Orange's TalkNow 
launch taking the 'watch this space' track and Ericsson bigging up 
the technology whilst admitting it has no European handsets ready or 
planned, standards could well be far from the largest stumbling block 
for PTT. 

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