Global Economics

Glitter and New Gizmos at 3GSM


A big spotlight was on mobile TV and new offerings from Nokia, HP, and Motorola at this year's mobile-phone industry shindig

It could have been a scene out of a Bollywood film. Lara Dutta, Bollywood star and former Miss Universe, sat in a nearly empty ballroom, her flowing black sari contrasting with the white tablecloths, her gigantic diamond earrings rivaling the chandeliers for grandeur. She wasn't in a film, though, but rather at the 3GSM Congress in Barcelona, a mobile-phone industry event known more for geeks than glamour.

But the entertainment and wireless industries are moving closer together, as Dutta's presence illustrated. Or at least they're trying to. Finnish handset maker Nokia (NOK) pushed the technology a step closer Feb. 12 when it unveiled a new phone, the N77, designed with mobile television viewing in mind. It has a larger, rectangular screen and helpful user features, such as one that reminds them when a favorite sporting event is on.

At least in India, the entertainment industry is anxious to exploit the new technology. "I think it's quite exciting," Dutta, in Barcelona to promote Bollywood's effort to go mobile, told BusinessWeek.com. "As an actor, I think it's fascinating to see whether the way films are made will change because you're making it look good on that 2-by-2 screen."

Mobile TV's Hurdles

It remains unclear whether the viewing public is as enthusiastic, though. So far, only Italy and, surprisingly, Vietnam, have networks offering mobile broadcasting technology, known as DVB-H, which is supposed to deliver a more reliable signal than existing technology. Telcos are still trying to figure out business models that will allow them to generate revenues from entertainment. "It's a huge phenomenon, it just takes a bit longer to get it up and running," says Jonas Geust, a Nokia vice-president responsible for the company's multimedia player phones.

The multimedia killer app may prove to be more prosaic. Also on Feb. 12, Nokia introduced a phone with built-in ability to receive signals from global positioning satellites. The 6110 Navigator comes with built-in maps that will instantly tell users where they are and help them get to where they want to go. Mobile TV requires the coordinated efforts of content providers, network operators, and handset makers—and companies have to convince consumers to buy the new services. But the Navigator, priced at $585 before operator subsidies, taps into the existing satellite network and doesn't even require a mobile phone network. "You take it out of the box and it works," says Nokia's Geust.

Still, Nokia remains bullish about the prospects for mobile TV. It's selling the N77 for about $480, but the actual price to consumers will be much lower, as operators try to encourage the spread of devices that will generate revenue on their 3G networks. In addition, the chips necessary to make the phones work are close to falling below $10 per phone. "That means mobile TV can became a mainstream application," Nokia CEO Olli-Pekka Kallasvuo told BusinessWeek.com.

The entertainment industry can hardly wait. Legendary Bollywood director Sanjay Gupta, who was also in Barcelona, is already planning to create special cuts of his films to optimize them for the small screen. "It's going to get us more visibility and recognition," Gupta says.

New Entrants and New Moves

Even as Nokia was broadening its product line into areas such as navigation and mobile TV, other electronics giants also made news at the 3GSM conference. Computer and printer maker Hewlett-Packard (HPQ) announced its first mobile phone, the initial entry in an expected family of devices called the HP iPaq 500 series Voice Messenger. Built around Windows Mobile software from Microsoft (MSFT), the phone marks HP's entry into the hot but still relatively small and fragmented "smartphone" market (see BusinessWeek.com, 2/12/07, "HP Repackages the iPaq").

The dual-mode handset works over conventional GSM-type mobile networks but also supports Wi-Fi, which means it allows for free or low-cost wireless Voice-over-IP (VoIP) calls. That's one reason British Telecom (BT) has elected to add an early version called the iPaq 514 to the lineup of devices it offers for its "Fusion" service. BT's Fusion lets customers use a single device for both mobile calling and lower-cost VoIP calls when they're in the office, at home, or at an BT Openzone Wi-Fi hot spot.

Motorola (MOT) also threw a surprise curve ball, announcing its first new handset in several years to use the Symbian mobile phone operating system from Symbian Ltd. The London-based company's operating software currently dominates the market for smartphones, and Motorola was an original member of the industry consortium that established the company. But in recent years, Motorola had backed away from Symbian and committed its high-end handset strategy to the rival Windows Mobile (see BusinessWeek.com, 2/8/07, "Surprise: That Mobile Is Running Windows").

Motorola's return to the Symbian fold was seen as a coup for the Nokia-backed but independent software maker. The new Motorola handset, called the MotoRIZR Z8, uses a snazzy slider design and includes a 2-megapixel camera and support for a faster variant of 3G called HSDPA. Microsoft brushed off any symbolism in Motorola's move, rolling out a batch of its own new Windows Mobile software licensees that also included two new models from Motorola.

Ewing is BusinessWeek's European regional editor, and Reinhardt is Europe channel editor for BusinessWeek.com.

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